Pressure on China to boost yuan as currency clash spreads
09 Oct 2010
Ministers from the Group of 20 nations repeated a call on export powerhouse China to spend more at home and ease trade imbalances with debtor countries such as the United States in order to avert a spread of the currency clash and save a still-fragile global economic recovery.
The call came amidst increasing fears that a weak US dollar could mar the current US-led economic recovery and push the world into a round of currency depreciations by individual countries wanting to boost their sagging exports.
US Treasury Secretary Timothy Geithner sought to marshal support from the International Monetary Fund and the Group of 20 economic powers to "speak out effectively about challenges and marshal support for action."
Geithner said it was foreign exchange intervention by countries (meaning China) trying to keep their undervalued currencies from appreciating that threatened a global recovery.
Speaking in the same lines, billionaire investor George Soros also said the "lop-sided" global currency system "controlled" by China is the main hurdle to sustained global recovery.
"One of the basic imbalances that was at the root of the financial crisis and which needs to be corrected is the chronic surplus in China and big deficit in the United States," Soros said in comments broadcast on BBC.