Obama on Weak Footing in China: Today's Outrage

SHANGHAI (TheStreet) -- President Obama arrived in China with a conciliatory message and an economic focus.

Those who want Obama to hammer on the age-old human rights issues will no doubt be disappointed. This is not the time for tough talk and China has the upper hand.

China is, after all, the biggest financial backer of the U.S. deficit, holding about more than $2 trillion in foreign currency reserves that are mainly in dollars, including about $800 billion in U.S. Treasury bonds.

The U.S. also needs China for cheap imports -- providing recession-priced goods in stores such as Wal-Mart (WMT) -- and as a major market for U.S. companies from GE(GE) to Ford (F) to Apple (AAPL).

Obama may harbor concern about the controlled value of China's Yuan -- about the only exchange rate that makes the U.S. dollar look strong -- but he can't afford to press on China's currency considering that the general weakness of the dollar is devaluing China's U.S. holdings.

China is, in fact, giving Obama grief about low U.S. interest rates and stimulus spending that could further undermine the dollar. That will end up creating a stalemate on currencies. Those are the issues that Obama will save for private meetings in Beijing.

In his warm up in Shanghai today, Obama appears to be quickly dispensing the traditional human rights rhetoric in a manner that is more encouraging than threatening. Speaking to a student audience, he addressed "universal rights" such as freedom of expression and religion and access to information.