G20 summit to cut deal on trade imbalance: Seoul

08:42, November 04, 2010      

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South Korean President Lee Myung-Bak said Wednesday that leaders attending next week's G20 in Seoul are expected to work out a compromise deal that eases global trade imbalances and avoid a so-called "currency war" that harms economic recovery.

Lee told a press conference in Seoul that China, an engine for Asian and global economic revival, will play a cooperative role at the upcoming November 11-12 G20 summit meeting.

Earlier during the financial ministers' meeting also held in South Korea, the United States put forward a proposal that calls the world's largest economies to agree to a target for the size of their trade imbalances.

It suggests the deficits or surplus in a country's current account – the trade balance and some financial transactions – should be brought under 4 percent of the GDP, by the year of 2015.

The United States' current account deficit amounts to 3 percent of its GDP, while China's current account surplus is about 5 percent of its GDP, and Germany's surplus is about 6 percent of its GDP.

Chinese officials, including Yi Gang, vice-governor of the People's Bank of China, the central bank, say that the country does not seek a large surplus and will work to bring its current account surplus to within 4 percent of the GDP.

China knows "balanced global growth is beneficial to all countries. I'm positive that China will be cooperative in handling various issues at the G20 summit," President Lee Myung-Bak told reporters.

Lee also said South Korea and the United States have agreed to complete work on their long-stalled free trade agreement before next week's G20 summit, and expressed hope eventually of reaching such accords with China and Japan, the two largest economies in Asia.

By People's Daily Online


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