November 12, 2010 11:08
Leaders of the Group of 20 major economic powers have opened a summit in Seoul with sharp divisions about how to ease trade imbalances that threaten global growth. The G20 leaders had a working dinner Thursday at Seoul's National Museum of Korea and were due to meet again Friday for the final day of the summit.
Ahead of the dinner, U.S. President Barack Obama told a news conference that he believes the G20 leaders can find a formula for balanced and sustainable growth. But G20 members remain divided about trade imbalances that have caused large deficits in importing nations such as the United States and huge surpluses in exporters such as China and Germany.
The United States wants the G20 to agree on numerical limits to the current account surpluses of big exporters. German Chancellor Angela Merkel rejected that idea Thursday. Officials at the G20 meeting say negotiators have struggled for days to finalize a closing statement to be issued at the end of the summit. Washington also wants Beijing to speed up the strengthening of the yuan, a currency U.S. officials say is significantly undervalued and gives China a trade advantage.
China is one of several G20 members who complain that U.S. Federal Reserve measures to stimulate the U.S. economy will effectively devalue the dollar. They say investors will respond by shifting capital to other nations in search of higher returns, potentially triggering inflation and asset bubbles in those nations.
Former Federal Reserve Chairman Alan Greenspan accused the Obama administration Thursday of "pursuing a policy of currency weakening." He made the comment in an article published in the Financial Times newspaper.
U.S. Treasury Secretary Tim Geithner denied Greenspan's allegation in an interview with U.S. television network CNBC. Geithner said the United States will never seek to weaken its currency as a tool to gain competitive advantage or grow the economy.
In his news conference, Obama said stimulating the U.S. economy is important because it is the world's largest market and a "huge engine" for other countries to grow.
Some information in this story was provided by AFP.
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