China's premier says US-Chinese business ties "inextricably connected"

NEW YORK (AP) — Chinese Premier Wen Jiabao called Wednesday for improved ties between his country and the United States, saying that U.S.-Chinese business interests are "inextricably connected."

Relations between the two powers have suffered recently, and Wen's comments appear to be an effort to soothe anger in the United States ahead of a Thursday meeting with U.S. President Barack Obama. The countries are squabbling over a number of economic, trade, military and diplomatic matters, even as the United States pushes for Chinese help in settling nuclear standoffs with North Korea and Iran and on other global initiatives.

Wen told U.S. business executives on the sidelines of a United Nations summit that China wants a "strong and stable U.S., just as the U.S. needs a strong, stable China," The Wall Street Journal reported.

The politically sensitive U.S. trade deficit with China jumped to $26.2 billion in June, the largest one-month gap since October 2008. Wen, however, said the trade imbalance isn't intentional. Wen also was quoted as saying that the exchange rate of the yuan — China's currency — isn't the "main cause" of the bilateral trade imbalance.

Ahead of U.S. congressional elections in November and at a time of high American unemployment, China's currency policies are a major source of friction in ties with Washington. U.S. lawmakers say Beijing's tightly regulated yuan is undervalued, giving China's exporters an artificial advantage over U.S. manufacturers. They say Chinese policies cost Americans their jobs.

Obama, speaking Monday in Washington, said China's currency "is valued lower than market conditions would say it should be."

"So it gives them an advantage in trade," Obama said. "We are going to continue to insist that on this issue, and on all trade issues between us and China, that it's a two-way street."

Some U.S. lawmakers are pushing for a bill that would punish China if it doesn't do more to let the yuan rise.

The Obama-Wen meeting also comes as China lashes out at the United States for what Beijing says is interference in its territorial disputes in the South China Sea. China is also angry over U.S. arms sales to Beijing rival Taiwan and Obama's meeting earlier this year with the Dalai Lama, the exiled Tibetan Buddhist leader China calls a separatist.

Although the Obama administration wants to take a tough line with China ahead of the elections, it also recognizes that Beijing is crucial to dealing with a number of global problems. China is a veto-wielding member of the U.N. Security Council and recently passed Japan as the world's second-biggest economy.

Separately on Wednesday, Wen called for rich countries to help the poor fight AIDS.

Wen said at an AIDS meeting with African leaders that ignorance and discrimination can be as painful as the disease itself.

China, he said, would continue a "tireless campaign" against AIDS around the world. It has been a "tough and protracted battle, yet we have never shown fear or backed down," Wen said.

The U.N. has estimated that $28 billion to $50 billion will be needed annually between 2011 and 2015 to achieve universal access to treatment for HIV/AIDS.