Offers qualified support to US :

China open to G20 on new economic balance

US: A US drive to build a more balanced global economy gained the qualified support of China on Wednesday in a sign that Group of 20 leaders may be ready to take joint action to prevent future economic crises.

US President Barack Obama and other leaders of the G20 major developed and developing countries are due to meet in Pittsburgh on Thursday and Friday, with restoring economic growth and tackling climate change high on their agenda.

They are shifting their focus from fighting the global recession to preventing it from happening again in their third gathering since the collapse of investment bank Lehman Brothers a year ago.

Pittsburgh, once known as the “Steel City” and now considered one of America’s most livable cities, was braced for the arrival of G20 and other leaders and perhaps 3,000 journalists. Sporadic afternoon rainstorms pounded the roof of the convention center where the event was being staged.

Protest groups planned marches on the summit site. Concrete barriers were in place outside the PNC Financial Services Group building, suggested by anti-capitalist protesters as a target for rallies on Friday, along with other companies such as Starbucks and McDonald’s.

As a precaution, workers boarded up the glass entrance and covered statues outside the city’s popular Carnegie Museums of Art and Natural History.

Central to the talks will be a U.S. plan to correct the world’s economic imbalances by shrinking surpluses in big exporting countries like China and boosting savings in debt-laden nations that include the United States.

Rebalancing would take a monumental effort.

China’s private consumption makes up a little more than a third of overall gross domestic product, while in the United States and Britain, consumption accounted for nearly three quarters of GDP in boom times. The other side of the coin is savings. Chinese and Indian households last year saved about 40 percent and 32 percent of their disposable incomes, respectively, while the personal savings rate in the United States was just 3.2 percent.

Obama wants a framework of “mutual assessment” whereby the International Monetary Fund (IMF) makes policy recommendations on rebalancing to the G20 every six months, according to a paper obtained by Reuters.

Analysts believe Obama’s plan will meet resistance from Beijing should it pose any risk to China’s export-driven economic growth. So far, China is sounding engaged.

“We approve of countries strengthening their macroeconomic policy coordination and together pushing forward the sustainable and balanced development of the world economy,” China’s foreign ministry said.

China sounded much less sure about concrete coordinated policy action, saying advice from international financial bodies should be for reference only.

A senior Obama administration official said China had warmed to the rebalancing proposal, which he said was not aimed at any specific country.

“I think there has been a significant evolution in their thinking about this issue over the course of the (economic) crisis,” he said. Pittsburgh, Thursday, Reuters

Fact file

* China gives qualified support to US imbalances plan

* EU unveils plan for. pan-European banking supervision

* U.S., India wants strong. G20 stance vs. protectionism

* Obama has blunt message for world at U.N.