Obama: China currency policy an 'irritant'

Nov. 12, 2010 at 8:15 PM
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SEOUL, Nov. 12 (UPI) -- U.S. President Barack Obama took aim at China as the Group of 20 summit ended Friday, calling its undervalued currency "an irritant."

The president, speaking at a news conference in Seoul, suggested China bears much of the blame for global trade imbalances, The New York Times reported. He abandoned his usual cautious language on the subject and said China and other countries should not assume "their path to prosperity is paved simply with exports to the United States."

"Precisely because of China's success, it's very important that it act in a responsible fashion internationally," Obama said. "And the issue of the renminbi is one that is an irritant not just to the United States, but is an irritant to a lot of China's trading partners and those who are competing with China to sell goods around the world."

At the G20, Obama and other leaders agreed to pass along checks and balances of international trade to the International Monetary Fund to study.

The leaders asked the IMF to find "indicative guidelines composed of a range of indicators" that would "serve as a mechanism to facilitate timely identification of large imbalances that require preventative and corrective actions be taken," The Wall Street Journal reported.

The final agreement said countries with "overvalued flexible exchange rates" would be permitted to take "carefully designed macro-prudential measures."

But leaders clearly balked at putting teeth in the communique that would measure or correct trade imbalances this year.

"The idea is not to stall on solutions that would be put on the table too early," said French President Nicolas Sarkozy, who will chair the next G20 summit next year.

Canadian Prime Minister Stephen Harper said, "I think we've got everyone talking the same language, everyone understanding longer term what has to be done."

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