Obama says Washington not trying to contain China

US president Barack Obama said on Monday that Washington was not trying to contain China's rise but said trade between the two giants needed to be more balanced.

Addressing students at a town hall-style meeting in Shanghai on the first full day of his first trip to China, Obama said the notion that Washington and Beijing must be adversaries was not pre-destined.

Obama faces tensions with China over trade and Tibet on his visit to the emerging superpower for a summit that will grapple with economic imbalances and the future of the yuan currency. He arrived in Shanghai, China's commercial hub, late on Sunday.

"We do not seek to contain China's rise," Obama said before taking questions from the audience as well as from Chinese over the Internet.

"On the contrary, we welcome China as a strong and prosperous and successful member of the community of nations — a China that draws on the right strengths and creativity of individual Chinese."

"We do not seek to impose any system of government on any other nation but we also don't believe the principals we stand for are unique to our nation."

Chinese state-run Internet sites have asked the public for questions to quiz Obama at the youth meeting, and many had urged him to explain if he plans to meet the Dalai Lama, the exiled Tibetan leader whom Beijing brands a separatist.

These events will be a warm-up for Obama's summit with president Hu Jintao in the 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 US industry as significantly undervalued and stoking unsustainable global economic imbalances.

Obama noted that in 1979, when Washington established ties with the People's Republic of China, trade was worth several billion dollars, compared to more than $400 billion now.

"This trade could create even more jobs on both sides of the Pacific...as demands become more balanced, it can lead to even more prosperity," Obama said.

At a gathering of Asia-Pacific leaders in Singapore over the weekend, Hu pointedly ignored international calls for his government to raise the value of the yuan and make Chinese exports relatively more expensive.

He and other senior Chinese officials have instead accused other countries — implicitly including the United States — of embracing damaging trade protectionism aimed at Chinese goods.

A senior Chinese official on Monday made a fresh, thinly veiled criticism of Washington for running lax monetary and fiscal policies that risk undermining the dollar.

But having already made their gripes clear before the summit, Obama and Hu may avoid sharp public jabs as they focus on building goodwill between the the world's biggest and third biggest economies.

Obama said both Washington and Beijing must take "critical steps" to tackle global climate change.

Other countries are waiting to see what the United States and China will do ahead of a UN meeting in Copenhagen, Obama said.

China is considered the world's biggest annual emitter of carbon dioxide, the main greenhouse gas from human activity.

Beijing has said developing countries should not accept internationally binding ceilings on emissions while they focus on economic growth and escaping poverty.

China has had a huge trade surplus with the United States, and is also the largest foreign holder of US government bonds.

The US trade deficit with China widened 9.2% in September to $22.1 billion, the highest since November 2008, according to US data released last week.