Obama in China faces tensions on trade and Tibet

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US 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 currency.

Obama arrived in Shanghai, China's commercial hub, late on Sunday 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 questions to quiz Obama at the youth meeting, and many 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.

"The president will be talking about balanced, strong sustainable growth and the policies that go into making that happen," a US official, speaking on condition of anonymity, told Reuters.

Obama's message won backing from the managing director of the International Monetary Fund, Dominique Strauss-Kahn, who said on Monday that a stronger yuan was needed to help Beijing encourage more domestic consumption and ease global imbalances.

But 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.

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 world's biggest and third biggest economies.

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