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Hu faces critics in Congress, economic pressures back in China

China's President Hu met with US congressional leaders Thursday, amid reports that his country's economy may be overheating, driving up inflation. Is export-dependency the root of the problem?

By Staff writer / January 20, 2011

China's President Hu Jintao walks with Senate Majority Leader Harry Reid of Nev. on Capitol Hill in Washington, Thursday, Jan. 20. Senate Foreign Relations Committee Chairman Sen. John Kerry, D-Mass. is at center.

Carolyn Kaster/AP

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For all its strengths, China's economy confronts a difficult squeeze that was on display Thursday as President Hu Jintao held closed-door meetings with members of Congress in Washington.

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Mr. Hu met with congressional leaders who are less patient than President Obama over alleged unfair trade practices by China. If Beijing won't change its currency policies, US lawmakers are threatening that America could impose financial penalties on "Made in China" imports.

Hu also confronts pressures at home. The need to generate new jobs tilts policymakers toward the status quo – a push to promote exports and to invest in China's infrastructure. But growth numbers from China's government Thursday also amplified concerns about inflation and possible "overheating." Those concerns could nudge Chinese leaders, over time, toward reforms designed to stabilize the economy.

IN PICTURES: Hu Jintao's Washington visit

The competing pressures underscore that China's economy has significant weaknesses, even at a time when Americans are prone to view China as the world's leading economic power. (In a Pew Research Center poll this month, 47 percent of Americans gave that title to China, while 31 percent chose the United States.)

"China has an increasingly turbulent economy, heavily dependent on exports," Gordon Chang, a writer and former lawyer in China, testified Wednesday to the House Foreign Affairs Committee.

But what should this mean for the trade policies that occupy center stage during this week's bilateral meetings?

In statements this week, Congress appears to be torn two ways.

Some blended criticism of China with a conciliatory tone. House Speaker John Boehner (R) faulted Beijing on human rights but said the two nations' "deep economic ties have helped create new American jobs and expand both of our economies." He said the trade partners should "continue to resolve our differences in ways that benefit both of our countries and our people."

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