A recent string of ugly episodes have pitted the two great economies of America and China against each other. Recently, CNOOC, a Chinese oil company, announced its intentions to acquire Unocal, an American oil Company. After several prominent American politicians publicly stated their opposition to the deal, a high-ranking Chinese General suggested continued American interference in Chinese economic and political issues might warrant the use of nuclear weapons. In addressing the increasingly fragile state of Sino-US relations, President Bush highlighted several sources of economic conflict between the two nations. Topping his list was China’s currency peg, which he labeled a ‘difficulty.’ Bush admitted the peg has become a source of tension between the two countries, and he will continue to convince them that it is in their best interest to revalue. The Washington Post reports:

"We have some difficulties on the trade front with China, and one such difficulty is their currency," Bush said at a joint news conference with Australian Prime Minister John Howard. "And we’ve worked with China to convince them that it makes sense for them to change how they value their currency," Bush added.

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