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BEIJING (AFP) –
China and the United States on Tuesday pledged to resolve their lingering trade disputes and combat protectionism, as visiting US President Barack Obama called on Beijing to let the yuan rise.

Comments by Obama and Chinese President Hu Jintao to reporters after their summit however gave no further specifics on how the two economic giants planned to defuse mounting trade rancour marked by a series of tit-for-tat actions.

The two sides said in a joint statement that they "recognise the importance of open trade and investment to their domestic economies and to the global economy, and are committed to jointly fight protectionism".

Hu said they would "continue to have consultations on an equal footing to properly resolve economic and trade frictions in a joint effort to uphold the sound and steady growth of their business ties and trade."

In his comments, Obama raised the two countries' central trade dispute -- accusations that China keeps its currency undervalued to boost exports at the expense of those of other countries -- but tread softly.

"I was pleased to note the Chinese commitment, made in past statements, to move toward a more market-oriented exchange rate over time," Obama said as Hu looked on.

"I emphasised in our discussions, as have others in the region, that doing so based on economic fundamentals would make an essential contribution to the global (economic) rebalancing effort."

China has come under increasing pressure to loosen its grip on the yuan, with Asia-Pacific finance ministers last week complaining about it at a regional summit in Singapore.

International Monetary Fund chief Dominique Strauss-Kahn, during a visit to Beijing on Tuesday, urged China to let the yuan rise "sooner rather than later", saying it would benefit both the Chinese and global economies.

On the yuan, Hu noted merely that "the two sides reiterated that they will continue to increase dialogue and cooperation in macroeconomic and financial policies."

The world's number-one and number-three economies have swapped a series of accusations of dumping and other unfair trade practices since September, when the Obama administration announced it would slap duties on Chinese-made tyres.

Chinese Commerce Minister Chen Deming raised the temperature on Friday at the Asia-Pacific summit in Singapore, lashing out at what he called an "unprecedented" number of trade measures aimed at China this year.

"These measures have bad and profound implications for free international trade," Chen told reporters, while not specifically naming the United States.

In what appeared to be a reference to such disputes, Hu said, "I stressed to President Obama that under the current circumstances, our two countries need to more strongly oppose and reject protectionism in all its manifestations."

Obama praised China for its four-trillion-yuan (585-billion-dollar) economic stimulus plan, which he said had helped the global recovery effort.

"So far China's partnership has proved critical in our effort to pull ourselves out of the worst recession in generations," he said.

But he repeated a call he made in Singapore for a rebalancing of the global economic order under which the United States would not be relied upon to bear the overwhelming burden of global consumption.

The US government, which runs a massive trade deficit with China, has pressured Beijing to spur domestic consumption in its fast-growing economy as a way of addressing this imbalance.

Hu did not address such demands in his remarks, but a joint statement said: "China will continue to implement policies to adjust economic structure, raise household incomes, and expand domestic demand to increase the contribution of consumption to GDP growth."

KABUL (AFP) –
Afghan President Hamid Karzai vowed Tuesday that his new government would eradicate corruption and unite the country after months of political chaos as he offered an olive branch to Taliban insurgents.

Under pressure from US President Barack Obama to wipe out corruption after a turbulent election process steeped in fraud, Karzai used his first appearance since electoral authorities declared him president to pledge a cleaner rule.

"Afghanistan's image has been tainted by corruption. Our government's image has been tainted by corruption," Karzai told a press conference flanked by vice-president Mohammad Qasim Fahim, who is widely accused of rights abuses.

"We will strive, by any means possible, to eradicate this stain."

Karzai was declared president for another five years after the election commission, whose chief he appointed, cancelled a run-off ballot following the withdrawal of his only challenger, Abdullah Abdullah.

Karzai has been urged by a number of world leaders to ensure his next government can command the support of all Afghans as Obama mulls whether to pour tens of thousands more US troops into battle against the Taliban.

"The future government will be a government that reflects all the people of Afghanistan... We hope that no-one feels themselves isolated from this future government," he said.

The 51-year-old president, whose warm relations with the West have cooled over corruption and spiralling insecurity, also urged his Taliban "brothers" "to come home and embrace their land".

The Taliban insurgency is now at its deadliest, contributing to record US fatalities eight years since the militia was driven out of Kabul by a US-led invasion, paving the way for Karzai to take power.

The Islamists ridiculed Karzai as a "puppet" president of the West, however, and snubbed his offer of an olive branch.

"We do not attach any value to these offers of peace by Karzai as we know they are empty words," Yousuf Ahmadi, a Taliban spokesman, told AFP.

Obama and UN chief Ban Ki-moon led world powers in congratulating Karzai, but the US president called for "a much more serious effort to eradicate corruption" and a "new chapter" in cooperation between the two countries.

"This has to be (the) point in time in which we begin to write a new chapter based on improved governance," Obama said he told Karzai by telephone.

"The truth is not going to be in words, it's going to be in deeds," added the US president.

The New York Times reported the Obama administration was pressing Karzai to set up an anti-corruption commission, which would establish "strict accountability" for national and provincial government officials.

US and European officials are also seeking the arrests of what one US envoy termed "the more blatantly corrupt" people in government, the paper added.

British Prime Minister Gordon Brown, whose country has the second largest contingent of troops in Afghanistan, urged Karzai "to take immediate action against corruption".

Abdullah quit the contest on Sunday, saying there were no safeguards against a repeat of widespread fraud that resulted in the rejection of nearly a quarter of votes cast in August.

Karzai's anointment by the Independent Election Commission sought to draw a line under two months of political chaos in the conflict-ridden nation, where 100,000 NATO and US troops are fighting the Taliban.

Ban met Karzai and Abdullah amid a concerted diplomatic push to bring a quick end to the paralysis, which has undermined Western efforts to cultivate democracy in Afghanistan.

IEC chief Azizullah Ludin, a Karzai appointee who oversaw the fraud-riddled first round, said the decision had been made in line with the provisions of Afghan law and was "consistent with the high interest of the Afghan people".

There had been widespread unease about staging the November 7 run-off poll.

First-round turnout was as low as five percent in areas and the Taliban had threatened fresh attacks.