China has retorted after the United States promised to "take a tougher line" with Beijing in regards to currency and trade. Barack Obama said yesterday that he would make sure unfair advantages were not being given by countries to their currencies against the dollar. US companies have complained that the Chinese Yuan is artificially undervalued to give Chinese industries a price advantage.
A Chinese foreign ministry spokesman, Ma Zhaoxu, said the value of the Yuan was "not the main reason" for the trade surplus of China with the United States. He went on to say that the "level of the Yuan is close to reasonable and balanced", and "accusations and pressure do not help to solve the problem".
When asked at a meeting with Senate democrats, Obama was asked about the possibility of breaking Chinese ties. He replied that he would make sure that they, along with other countries, abided by trade agreements; but, warned that it would be "a mistake" for the United States to become protectionist. He stated his administration would "make sure that our [the US] goods are not artificially inflated in price" and that China's goods were not deflated. Trade between the two countries came to a total of US$409 billion  last year, with a US gap of US$266 billion .
Diplomatic relations between the two countries have been strained recently over a Taiwanese arms deal, Obama visiting the Dalai Lama and Internet censorship.

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China and US clash over currency