G20 members are committed to avoid the "currency war" Do not struggle to collaborate

The two-day G20 summit on the 12th at Seoul ended. Issued after the meeting, "Seoul Declaration", the countries agreed that the most important is to strengthen the coordination of macroeconomic policies. South Korean President Lee Myung-bak at the closing ceremony, said the summit will be temporarily as a "currency war" ends. States also agreed to study and formulate a set of "reference standards" to help find the global economic turmoil may trigger a major current account imbalances.

Exchange rate reform should be "progressive"

Recent "currency war" smoke filled the world, therefore, to discuss exchange rate issues and conclusions are all looking for one of the greatest summit. Information obtained from the current view, all countries agreed in principle at least to avoid the issue in the exchange rate against each other.

After the publication of the "Seoul Declaration" claims, G20 members of the Group pledged to take macro-control measures to ensure financial market stability, there is in the maintenance of price stability to promote economic recovery, monetary policy and adopt more market-determined exchange rates reflect economic fundamentals policy measures to avoid competitive devaluation. Developed economies, particularly economies of the major reserve currency liquidity risk should be excessive and disorderly exchange rate fluctuations remain vigilant. "At least now, the so-called threat of war no longer the currency." Lee, 12, said at a press conference. On the same day, German Finance Minister Schäuble said the money worries of war "has been dissipated."

According to local media quoted a U.S. official as saying the meeting also reached a consensus on the exchange rate, exchange rate policy adjustments that will gradually advance. Some of the participants of the meeting, U.S. officials said the U.S. exchange rate reform on China's was "encouraged."

At this summit, the United States frequently in the exchange rate put pressure on China, and implied that China's exchange rate policy is one of the factors that contribute to global imbalances. But this view strongly rejected by the Chinese.

During the summit, Chinese officials said the global economic imbalances in the process of economic globalization is an objective reflection of both the transfer and capital flows and industry related, it is trade imbalances, monetary system and imbalance as well as some developed countries, caused by inappropriate macroeconomic policies the final analysis, the imbalance caused by uneven development between North and South.

U.S. policy is alleged to have "shortcomings"

Instead, it touches on the policy of the United States to attend the summit was a widely criticized countries. Even the IMF also said that the latest U.S. economic policy has "shortcomings."

Earlier this month, the Fed launched a new round of 6,000 billion dollars in assets purchase program. But is widely believed that similar initiatives can not pull the U.S. economy, but rather may bring many side effects to the global, such as increased influx of hot money in emerging markets, pushing up asset prices and exchange rate fluctuations induced, and so on.

Attend the summit, Brazilian President Rosoff openly criticized the U.S. new round of quantitative easing policy, Rosoff said, the weak dollar policy of the United States to implement damage around the world, which will result in protectionism. Forced by the influx of hot money, the Brazilian government for its previously announced investment in fixed income assets heavily taxed in order to avoid appreciation of their currencies. The Brazilian Government has also repeatedly criticized the United States to deliberately underestimate the dollar to stimulate exports, "disguised" to raise prices of imported goods.

12 IMF's Strauss-Kahn pointed out that a new round of Fed QE "right direction" but that does not mean there is no "weaknesses." Recently, IMF and the World Bank has repeatedly warned that the U.S. may lead to quantitative easing in emerging market risk of asset bubbles. The summit declaration also highlighted the pressure faced by too much hot money inflows in emerging economies, to take regulatory measures to counter it.

China stressed during the summit, the major reserve currency economies should implement responsible policies to maintain relatively stable exchange rate, strengthen the emerging market countries and developing countries cope with financial risks, and gradually ease the liquidity problems that cause the risk of foreign exchange fundamental contradiction.

Development of early warning indicators of crisis

Experts believe that the summit achieved one of the greatest achievements, as is awareness of the importance for policy coordination, which is considered the biggest threat to world economic risks.

Chinese President Hu Jintao at the summit that the world economy is slowly recovering, but still insufficient aggregate demand, the lack of new economic growth point. Differences in national economic policy objectives, macroeconomic policy coordination more difficult, the world economic recovery, vulnerability and imbalance further demonstrated.

To this end, China proposes to improve the framework of mechanisms to promote cooperation and development. Specifically, one should continue to adhere to the guiding principles for Member States to fully take into account varying national circumstances and stages of development, understanding and respect for the countries to choose development paths and policy autonomy; second is to improve the framework to enable the frame to the length from the short-term emergency changes in effective governance, the strengthening of national long-term policy coordination, promoting economic complementarity and mutual growth.

According to the statement after the meeting, countries recognize the same: uneven growth and the growing imbalance, the actions are contributing to the deviation from the global agreement countries, fragmentation, lack of coordination of the global policy action, it will only lead to bad the world economy direction.

According to the statement, G20 finance ministers next year will start to develop a so-called "reference standards", as an early-warning indicators to identify the significant imbalance in the global economy and the need for prompt response.

Non-executive chairman of Morgan Stanley Asia Stephen Roach pointed out, G20 reached the agreement, bilateral exchange rate will help to focus the issue of transfer from the off, he thought it was more feasible to address global imbalances, a framework, because it would G20 members with all the constraints, requires States to take measures to restrict their trade and savings imbalances