Tensions spill over as Obama attacks Beijing's undervalued yuan

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clipped from www.timesonline.co.uk Long-simmering tensions between Beijing and Washington over the value of China’s currency have spilled over into angry words at the highest level, further damaging ties hit by a series of disputes in the few brief weeks since the start of the year. The chill in one of the world’s most important diplomatic relationships is almost certain to deepen in the next few months as the world’s largest and third-largest economies tackle an array of contentious issues, ranging from cyber attacks to the Dalai Lama. China responded swiftly to a pledge from President Barack Obama that he would be tougher with Beijing over the value of the yuan, which Washington believes is artificially undervalued. Foreign Ministry spokesman Ma Zhaoxu said: “Accusations and pressure do not help to solve the problem." However, there is the risk of one side overplaying its hand: US approval last month of arms sales to Taiwan, flagged months in advance, has drawn unusually fierce angry volleys from Beijing.

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