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China urges stable currencies, fast growth
G20 vows to combat oil, other economic risks
10/16/2005
XIANGHE, China, Oct 15 (Reuters): The G20 group of rich and developing nations is concerned high oil prices and other risks and imbalances, including rising protectionist tendencies, will increase economic uncertainty, according to a draft communique.
Finance ministers and central bank chiefs from the G20 countries agreed to adopt whatever policies were necessary to counter such uncertainty, said the draft.
"We are resolved to implement the necessary fiscal, monetary and exchange rate policies (and) accelerate structural adjustments to resolve these imbalances and risks," the draft said.
Ministers and central bankers from the world's rich countries and developing ones such as China and India were meeting near Beijing.
"We welcomed the ongoing expansion of the world economy, while recognising low growth and growing poverty in some developing countries," they said in the draft.
Oil, which Japanese Finance Minister Sadakazu Tanigaki said was the focus of Saturday's morning session, attracted special attention.
"To stabilise the oil price at a reasonable level we agree to work together and call on the international community to strengthen cooperation to improve production and refining capacities, and to enhance dialogues between oil suppliers and consumers through the existing fora."
According to the draft, the G20 stressed the need to promote energy saving and alternative sources of energy and to reduce subsidies on oil products.
Meanwhile, Chinese President Hu Jintao, under pressure from Washington to let the yuan rise faster, said Saturday that major countries had an obligation to keep their currencies reasonably steady for the sake of the world economy.
Hu was giving a speech to open a two-day meeting of finance ministers and central bank governors from 20 rich and developing nations that will take stock of prospects for growth and try to give a boost to flagging world trade talks.
"To jointly promote the balanced and orderly development of the world economy, all countries, major economies in particular, should not only adopt responsible economic policies to introduce necessary economic restructuring, keep major currencies reasonably stable and prevent trade protectionism," Hu said.
Fearing a dearer currency would slow its export-driven growth and destablise its fragile financial system, China has firmly resisted calls by Washington to build on July's 2.1 per cent revaluation of the yuan in order to help reduce the gaping US trade deficit.
Hu did not directly address the yuan, which has risen less than 0.3 per cent since China said it would let the currency float following the revaluation, but he said China still had a long way to go to modernise its economy and improve living standards.
The ruling Communist Party is aiming to raise average per capita incomes to $3,000 a year by 2020 from about $1,400 now.
With abundant labour, huge domestic demand from its 1.3 billion people, a high savings rate and political stability, China enjoyed the preconditions for fast growth, Hu said.
But he said the economy also faced serious constraints in natural resources as well as environmental problems.
The United States and the European Union had this week put forward what Wolfowitz called important offers to cut farm subsidies and trade tariffs.
But he said the talks would fail unless all countries made real concessions to reach an outline deal at a meeting in Hong Kong in December of the WTO's 148 member nations.
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