G20 focus on global economy
China: Ministers and bankers from the G20 nations met in China
Thursday to discuss challenges facing the global monetary system, with
talks likely to centre on destabilising capital flows.
French President Nicolas Sarkozy and Chinese Vice Premier Wang Qishan
opened the one-day meeting of Finance Ministers and Central Bank chiefs
from the Group of 20 leading economies in the eastern Chinese city of
Nanjing.
US Treasury Secretary Timothy Geithner, International Monetary Fund
Chief Dominique Strauss-Kahn and OECD secretary-general Angel Gurria
also attended the talks organized by France, which holds the G20’s
rotating presidency.
The meeting — which comes as the global recovery faces major hurdles
such as Japan’s quake-tsunami disaster and the ongoing eurozone debt
woes — aims to hone in on key ways to reform the monetary system.
The day featured closed-door group sessions on global capital flows —
which emerging economies including China say are fuelling inflation and
driving up the value of their currencies — and a keynote speech from
Strauss-Kahn.
Host China has ruled out any discussion of its controversial exchange
rate regime, despite ongoing criticism that its yuan is massively
undervalued, giving its exporters an unfair trade advantage.
Experts including Nobel prize-winning economist Robert Mundell and
Cornell University professor Eswar Prasad, a former head of the IMF’s
China division, will join the discussions.
Sarkozy said Wednesday he hoped the seminar would spark a debate
about “a hugely necessary reform of the international monetary system”.
“We must fight against... monetary instability that risks reducing to
nothing the competitive efforts that you are all making,” the French
leader said.
Aides close to Sarkozy have however said that no concrete decisions
are expected from the seminar.
At a meeting in Paris in February, the G20 agreed to a set of
indicators to measure economic imbalances between surplus exporters such
as China and nations with structural deficits such as the United States.
The non-binding indicators gauge internal imbalances, focusing on
budget deficits, public debt and private savings.
External indicators, meanwhile, look at the trade balance and
investment flows, “taking due consideration of exchange rate, fiscal,
monetary and other policies,” the G20 has said. But China, which has the
world’s largest foreign reserves valued at more than $2.8 trillion, has
baulked at many of the indicators amid fears they could result in more
pressure over trade and its currency.
In Nanjing, though, such imbalances “will not be at the centre of
discussions,” one Western diplomat said earlier. Nanjing, Thursday, AFP |