Obama to China: 'Enough's Enough'

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Marco Werman: Even as he keeps an eye on Syria, President Obama is focused elsewhere at the moment. He's getting ready for a trip to Australia and Indonesia, after hosting the Asia Pacific Economic Cooperation Summit in Hawaii. Speaking there yesterday, Obama warned China to stop 'gaming the international system' and he said 'enough is enough' when it comes to China's refusal to allow its currency to float.

President Obama: Most economists estimate that the RMB is devalued by 20 to 25 percent. That means our exports to China are that much more expensive and their imports into the United States are that much cheaper.

Werman: The President also called on China to relax its trade practices. All this is not going down well over there. Mary Kay Magistad is The World's Beijing correspondent. This was a pretty direct and highly public attack on China from the President himself, Mary Kay. How is it being received there?

Mary Kay Magistad: Well, all over the front pages of the Chinese newspapers today were comments very similar to each other that said, basically, the United States' economic problems were not caused by the level of our currency. Its problems are much bigger than that, and even if we let our currency float, it's not going to solve the U.S. economic problems. And we maintain a responsible policy toward our currency. We're letting it increase in value gradually because we have to protect our export sector. If we were to suddenly let it float, we would have a lot of factories shutting down, a lot of jobs lost, and a lot of social unrest. Of course, this is perhaps responsible from the Chinese perspective toward the Chinese population and the Chinese economy in the short term. It's not necessarily responsible for China as a global player that likes to be seen increasingly as a global leader.

Werman: You know, President Obama said about China that it's now grown up, and needs to start acting like it. Is that what he was talking about? That kind of stuff?

Magistad: It's part of it, yeah. Interestingly the Chinese media didn't really grab onto that particular part of what he said, neither feeling offended that he was suggesting that China was not acting like a grownup or saying China actually is a grownup now and should be acting like it. In the last few months, in particular, China seems to have been wanting to have it both ways. To say 'Hey, look, we're still a poor developing country, so you can't be looking to us to bail you out when you have problems. You sort it out yourselves, and if you get your economy so that it is stable and attractive to us, maybe we'll put our money there.' And yet they also want to be seen as a global leader. And what they've said in response to some of what President Obama said is look, you want us to play by the global rules? Well we didn't help set those rules. If you want us to play by rules, we should have a say in what they are, and we should make sure they work to our advantage.

Werman: You know, there's this other impression too, here in the U.S., Mary Kay, and that is of the declining USA and a rising China. I imagine Chinese leaders would like to leave most people in the world with that impression, but is the reality in China that this is the Chinese century?

Magistad: It's interesting. Over the last couple of years, Premier Wen Jiabao has made a point when he has spoken in public, of trying to put a damper on that way of thinking of China. At the World Economic Forum, which in some ways tends to be this cheerleading session for China's economic rise, Wen Jiabao said twice, last year and this year, look, the model of growth we have is neither stable nor sustainable. We have serious problems. We need to be dealing with them sooner rather than later. So, yes, China has great aspirations. Yes, China has had strong economic growth. If we're going to continue to have strong economic growth, we need to make some changes and we need to make them soon.

Werman: The World's Beijing correspondent, Mary Kay Magistad. Thanks, as always.

Magistad: Thanks, Marco.