Leaders of the world's biggest economies agreed on Friday to curb “persistently large imbalances” in saving and spending but deferred until next year tough decisions on how to identify and fix them.
The agreement, the culmination of a two-day summit meeting of leaders of the Group of 20 industrialised and emerging powers, fell short of initial U.S. demands for numerical targets on trade surpluses and deficits. But it reflected a consensus that longstanding economic patterns in particular, the United States consuming too much, and China too little were no longer sustainable.
U.S. President Barack Obama called the agreement significant, even if not as dramatic or far-reaching as the one that emerged from the first G20 leaders' meeting in 2008, when nations came together quickly amid fears of a global meltdown.
“Instead of hitting home runs, sometimes we're going to hit singles,” Mr. Obama said. “But they're really important singles.”
The measured language on imbalances reflected the clout of China, which successfully resisted pressure for its currency to appreciate quickly, and Germany, which insisted that an examination of imbalances include fiscal, monetary and other policies, not just trade.
China's President Hu Jintao pledged to shift the Chinese economy away from reliance on exports and toward domestic consumption, a strategy urged by the United States and most economists. Mr. Obama said he had raised China's exchange-rate policy with Mr. Hu and that “we will closely watch the appreciation of China's currency.”
Mr. Obama, who had brought a trade-driven agenda to his 10-day trip to Asia but occasionally found his priorities frustrated by global disagreement, warned, “No nation should assume that their path to prosperity is paved simply with exports to the United States.”
In a news conference, Mr. Obama also used some of his strongest language to date on China's role in the world economy, making it clear that he expected Beijing to assume part of the burden of leadership.
“Precisely because of China's success, it's very important that it act in a responsible fashion internationally,” he said. “And the issue of the renminbi is one that is an irritant not just to the U.S., but is an irritant to a lot of China's trading partners and those who are competing with China to sell goods around the world. It is undervalued. And China spends enormous amounts intervening in the market to keep it undervalued.” — © New York Times News Service
