U.S. pressure on China fails to get backing from G20 members

U.S. pressure on China fails to get backing from G20 members

The United States failed to get other members of the world’s biggest economic group to support its move to pressure China in letting the yuan float as fast as the Americans would like.

Instead of a strong statement at the conclusion of the summit, G20 leaders including U.S. President Barack Obama, released a joint declaration urging its members to stop engaging in “competitive devaluation” of national currencies.  The Americans were pushing for the use of the more definite words “competitive undervaluation,” a term which was turned down by the other members.

The statement did not specify China but everyone in the global financial world knows that the U.S. is trying to coax the Asian superpower to relax its currency.

The U.S. has increasingly criticized China in the past few months for intervening to keep its currency weaker for trade advantage. Chinese officials denied the allegations and later said that it is China who ultimately decides what is best for the Chinese economy and not anyone else.

The recent setback by the U.S. follows another failure last week to forge a new free trade deal with its ally South Korea. The successive defeats reflect a waning influence of Washington in global financial affairs.

Obama continued to criticize China’s handling of the yuan in a press conference.

“China spends enormous amounts of money intervening in the market to keep it undervalued so what we have said is it is important for China to follow a market-based system,” the U.S. President said. “We have to understand that this is not solved overnight. But it needs to be dealt with and I am confident it can be.”

Posted by James Fried on Friday November 12 2010, 6:37 AM EST. Ref: AP. All trademarks acknowledged. Filed under Featured News, Finance. Comments and Trackbacks closed. Follow responses: RSS 2.0