A China-focused business group’s advice to President-elect Barack Obama: the U.S. trade deficit is less of a problem than many believe.

Trade goes to the heart of China’s main reservations about the election of Mr. Obama, a concern shared by the groups like the Washington-based US-China Business Council that urged the president-elect’s team to “get it right” in setting policy related to business with Beijing. Even before Mr. Obama’s election, outgoing U.S. administration officials as well as Chinese leaders have said they fear that trade protectionist philosophy is getting a boost pretty much everywhere as the global economy flirts with recession.

On the campaign trail, Mr. Obama argued China’s currency exchange rate is manipulated, meaning the yuan is artificially weak against the U.S. dollar. The currency is one possible explanation for the trade imbalance, since a weak yuan would make Chinese products cheap in the U.S. and U.S. exports expensive in China. He also pledged to renegotiate U.S. trade deals, a stand that has prompted many Chinese academics to brace for a more hard-knuckled approach from Mr. Obama and the Democratic controlled congress on China’s currency, product safety, and other issues.

Source: Wall Street Journal