Rising yuan will not solve US economic woes
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The G20 is aiming to root out the causes of the global financial crisis, rather than a series of discussions which single out the economic policies of any specific country, said French Finance Minister Christine Lagarde at the meeting of finance ministers.
France has already rolled out an ambitious agenda to address global economic imbalances, price fluctuations, the monetary regime, and issues relating to development.
During the two-day meeting, which started on Friday, the attendees will hammer out a common mechanism for measuring global economic imbalances. "Once we have these indicators, and that's being debated at the moment and will continue to be debated during the next couple of days, then we will move on to agree guidelines," Lagarde said in Paris prior to the meeting.
"What we do not want is to dictate to any one country, 'Stop being competitive, stop exporting, stop consuming'," she said.
"The goal is to try to reach a better equilibrium that will be beneficial to all from an inflation point of view, for instance, or from a social fabric point of view," she added.
Some analysts said the meeting is designed to reach an accord on assessing countries' current accounts, exchange rates, currency reserves, public budgets, and private savings. The results of the meeting's deliberations will be announced on Saturday afternoon.
French President Nicolas Sarkozy has pledged to reform both the global monetary system and the commodities markets during his country's presidency of the G20, with the intention of defending the world's less-developed economies from currency and trade turbulence.
The United States has tried in recent weeks to encourage some developing economies, such as Brazil and India, to pressure China into an acceleration of yuan appreciation during the meeting.
However, the Governor of the People's Bank of China, the central bank, Zhou Xiaochuan said on Thursday that Beijing will decide the pace of the appreciation in accordance with its own economic conditions, and that external pressure cannot be the main driving force for exchange rate reform, according to reports from Reuters.
"External pressure has never been an important factor of consideration and we have never paid special attention to it," Zhou said on the sidelines of the G20 session.
"We mostly depend on our judgment ... to adjust the yuan's value independently," he added. "We do not pay too much attention to whether the external pressure is great or not."
"From our own independent point of view, for the sake of developing our own financial markets ... we need to reform the system and make it more flexible," he said.
The US has long urged China to appreciate the yuan as it suffers a significant trade deficit with the world's largest exporter. Washington has claimed that yuan appreciation would also help to create more jobs, but analysts said that an appreciation of China's currency won't alleviate the economic woes in the US.
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