Obama, on a four-day swing through western states less than two weeks before congressional elections, argued that the global trading regime needed to be restructured so that it was more fair.

"When a lot of the trade rules were initially set up, I think we neglected to drive as tough of a bargain as we could have," Obama said, specifically mentioning China amid rising trade and currency tensions with Beijing.

Obama said that US trade negotiators had initially allowed China to base its economy on low wage or low skilled assembly line production which at the time was not a huge loss to the US economy.

But, he argued, at the latest of his nationwide series of "backyard" conversations with voters, that inevitably China had wanted to begin making more advanced products like computers and cars.

"They move up the value stream of the economy.

"If we have the same rules as we had where they are able to keep our products out but we are wide open to anything they want to send in then we are going to be at a huge disadvantage."

"I want to expand trade ... but I want to do so by driving a better bargain with our trading partners," Obama said.

"The truth of the matter is they probably expect it. They are probably trying to figure out why we have been such pushovers the last couple of decades anyway."

Obama has made repeated calls on China over its yuan exchange rate, which his administration contends is grossly undervalued to boost Chinese exports.

However, last week his administration delayed a controversial report on China's currency until after a key Group of 20 summit in Seoul in mid-November, averting for now a showdown between the two superpowers.

Beijing pledged in June to allow limited currency reform, since when the yuan has risen less than three percent against the dollar.

The US trade deficit with China ballooned to a new record in August, sharply widening the overall trade gap, according to official date released this month.

And in another side of rising tensions over US-China trade, the House of Representatives last month passed a bill allowing the government to impose countervailing duties on imports from nations found to be manipulating their currencies.

earlier related report
China: Hu's US visit could have 'profound' impact on ties
Beijing (AFP) Oct 21, 2010 - Beijing said Thursday that plans were on track for President Hu Jintao's state visit to the United States in January, saying it believed the trip would have a "profound" influence on China-US ties.

US Attorney General Eric Holder, in Beijing for talks with senior Chinese officials, on Wednesday confirmed the date for Hu's visit, which comes as the world's top two economies are seeking to sort through a host of disputes.

Beijing has bristled at criticism from Washington about the value of the Chinese yuan, which some lawmakers have charged is undervalued by as much as 40 percent, giving Chinese exporters an unfair trade advantage.

The two sides are also at odds over a series of trade disputes and human rights issues, such as the case of jailed dissident Liu Xiaobo, who was awarded the 2010 Nobel Peace Prize, sparking Beijing's anger and Washington's praise.

"The two sides are keeping close communication on relevant preparation issues," foreign ministry spokesman Ma Zhaoxu told reporters.

"I believe that it will be a very important visit that can have profound, far-reaching influence on the future of China-US relations in the new period," Ma added.

"We sincerely wish a successful visit and hope it can further promote China-US relations in the 21st century."

Hu accepted Obama's invitation for a visit at the Group of 20 summit in Canada in June. The US leader visited China in November last year.

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