Obama in China faces tensions on trade and Tibet

By Caren Bohan

SHANGHAI (Reuters) - U.S. President Barack Obama faces tensions with China over trade and Tibet on his first visit to the emerging superpower for a summit that will grapple with economic imbalances and the future of the yuan.

Obama arrived in Shanghai, China's commercial hub, late on Sunday to torrential rain and is due to meet city officials and hold a town hall-style meeting with young people before heading to Beijing later on Monday.

Chinese state-run Internet sites have asked the public for suggested questions to quiz Obama with at the youth meeting, and many urged him to explain any plans to meet the Dalai Lama, the exiled Tibetan leader whom Beijing scorns as a "separatist."

These events will be a warm-up for Obama's summit with President Hu Jintao in the national capital on Tuesday that will cover trouble-spots such as North Korea and Iran, and efforts to forge a new climate pact.

Obama has said he will also raise the sensitive subjects of human rights, and sometimes tense trade ties and China's yuan currency, seen by U.S. industry as significantly undervalued and stoking unsustainable global economic imbalances.

"The president will be talking about balanced, strong sustainable growth and the policies that go into making that happen," a U.S. official told Reuters, though added they did not expect any tension over recent trade spats.

"We've had very good meetings with them around a variety of issues. We have a deep and broad economic relationship with them."

At a gathering of Asia-Pacific leaders in Singapore over the weekend, Hu pointedly ignored international calls for his government to help ease those imbalances by raising the value of the yuan, making Chinese exports relatively more expensive.