Obama prods China on yuan, but Hu silent

By Caren Bohan and Patricia Zengerle

BEIJING (Reuters) - U.S. President Barack Obama urged a reluctant China on Tuesday to let its yuan currency rise in value at a summit where strains over trade between the two giants crept into proclamations of goodwill.

Standing beside Obama after their summit, Chinese President Hu Jintao avoided mentioning the yuan or the dollar.

Instead, Hu emphasized during a joint media appearance the need to avoid trade protectionism in a thinly veiled reference to China's irritation over new U.S. tariffs on Chinese-made tyres, steel pipes and other products.

With the U.S. unemployment rate at 10.2 percent, one of Obama's priorities during his four-day trip to China is pressing Beijing over the huge trade imbalance between the two countries, a move he believes would pave the way for greater U.S. exports.

Washington says an undervalued yuan disadvantages U.S. manufacturers and is stoking global economic imbalances.

"I was pleased to note the Chinese commitment made in past statements to move towards a more market-oriented exchange rate over time," Obama said as Hu stood next to him on a podium with three Chinese and three U.S. flags in the background.

Obama said movement by China on its exchange rate would "make an essential contribution to the global rebalancing effort."

But his reference to China's "past statements" suggested that Hu might not have been forthcoming on how Beijing might respond.