Obama slams China over yuan policy

By Bae Ji-sook, Lee Hyo-won, Lee Tae-hoon

U.S. President Barack Obama said Friday that the world is back on the path to recovery and that he and other G20 state leaders will further resolve differences over disputes such as free trade agreements and the so-called currency war.

Obama strongly condemned China for its policy of keeping the yuan low against other currencies, while criticizing Korea’s exports of automobiles to the U.S.

At a press briefing held Friday after the G20 Seoul Summit, leaders announced the G20 Seoul Summit Leaders’ Declaration, President Obama said the world was in “broad agreement on the way forward.”

“We risk slipping back into old imbalances that created the economic crisis in the first place. The 20 major economies gathered here are in broad agreement on the way forward,” he said.

“The work that we do here is not going to seem dramatic. It is not always going to be world-changing. But step by step, what we're doing is building stronger international mechanisms and institutions that will help stabilize the world economy and reduce tensions among nations.”

Obama stressed sustainable and balanced growth. “Countries with large surpluses must shift away from unhealthy dependency on exports,” he said, adding exchange rates “must reflect economic realities.”

He denounced China’s trade and currency practice. “It (the yuan) is undervalued. And China spends enormous amounts of money intervening in the market to keep it undervalued,” he said, pitching his voice. "It is important for China in a gradual fashion to transition to a market-based system."

Obama reaffirmed that his main interest is for the U.S. workers, corporations and moreover, nationals, in getting the free trade agreement with South Korea ratified, which is not necessary good news for Korea seeking ratification without any changes. Washington has constantly requested for revisions of the agreement citing domestic opposition.

Asked whether he could convince Koreans to buy U.S. beef, one of the most controversial items of the deal, Obama simply answered, “Beef was not the only issue in the conversation. The larger one was automobiles.”

“I am not interested in making an announcement,” he said denying suggestions he would give up the FTA if he “fails to produce any fruit” or on the other hand rush ratification.
He said he believed that the talks will create a win-win effect in the end. But he confirmed, “My main job is to work for the American people, companies and create good jobs.”

Sarkozy vows realistic approach as G20 chair

French President Nicolas Sarkozy, the host of the next G20 summit, pledged Friday to guide the group of advanced and emerging economies in ``a realistic and responsible way.’’

At the conclusion of the Seoul summit, he told reporters that the meetings are a continuing process, and the G20 will work collaboratively and constructively with the International Monetary Fund (IMF) on global financial reform.

``The Korean presidency reached an agreement about things but we didn’t sort things out structurally... What is important is not a given country’s position on an issue but the fact that the members of the G20 are actually discussing it,’’ Sarkozy said. The French head of state wants leaders to debate subjects ``without taboos.’’

``In two years,, we have reformed the IMF and World Bank. Who would have imagined that before? It’s only possible at the G20.’’

Sarkozy added that he plans to meet Dominique Strauss Kahn, the IMF’s managing director, in December, before elaborating on France’s G20 ambitions in a January briefing. He also said that Chinese President Hu Jintao’s agreeing to host a working seminar in his country was a considerable achievement.

``There was a time when there was one dominant economy, the United States, and one currency, the dollar. We’re facing a new world that needs new ideas to ensure that capitalism is better regulated, and we need a multilateral monetary system.’’

Other goals he has set include stabilizing commodity prices ― following 2008 food riots in Haiti and Africa ― and reforming global governance, such as giving Africa a seat on the United Nations Security Council.

``Some emerging countries like Brazil have said stabilizing commodity prices needs to be approached carefully since massive amounts of capital are arriving and creating a bubble. It’s complicated and difficult (to find a common denominator among countries) but there is no doubt about the legitimacy of the G20.’’

Cameroon defends Seoul results

Stating that the G20 Seoul Summit made “real progress,” British Prime Minister David Cameron said leaders of the G20 countries ― including China ― showed genuine willingness to work together in avoiding a return to 1930’s protectionism and currency wars.

He said the communique pledged to bolster efforts to secure a deal on the stalled Doha Round of trade talks by saying, “Increasing trade is the biggest boost and the biggest stimulus we can give to the world economy.”

Cameron pointed out that U.S. President Barak Obama had told other G20 leaders that he would seek to "take a deal forward" if a "balanced" Doha deal can be achieved.

He also welcomed the G20’s decision to adopt a set of indicative guidelines as a means of assessing economic imbalances and help reorient trade between countries with surpluses and deficits.

"It puts pressure on the political leaders to think, 'Is what I'm about to do purely in my own short-term interest or in the long-term interest of trying to maximize global growth?’”Cameron said.

He underlined that “the key thing is this ― it is being discussed in a proper multilateral way without resort to tit-for-tat measures and selfish policies."

Cameron, however, acknowledged that the world's economic problems cannot be resolved overnight, saying he would like to see China move faster in restructuring the nation toward a more domestic demand-driven one.

“Slowly, slowly, China is moving into a position of rebalancing its economy," he said, noting that exchange rates in currency markets should reflect economic fundamentals.

bjs@koreatimes.co.kr
hyowlee@koreatimes.co.kr
leeth@koreatimes.co.kr