Smooth sailing for India, China at G20

09:04, November 15, 2010      

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The assumption from some sectors that, in the aftermath of US President Barack Obama's recent visit to India, the two countries would band together in international forums, proved to be way off the mark at the just-concluded G20 meeting in Seoul.

  On the contrary, what Indian Prime Minister Manmohan Singh had to say at the G20 Seoul Summit on Thursday and Friday strengthened China's position at the expense of the US. In his forthright speech at the plenary session of the G20 on November 12, he emphatically stated that "reserve-currency countries have a special responsibility to ensure that their monetary policies do not lead to destabilizing capital flows, which can put pressure on emerging markets."

  Singh did not hesitate to underscore the responsibilities of major economies such as the US, which he said have pursued reckless fiscal policies that caused the global financial meltdown.

  Along with China and Germany, India successfully prevented the move by the G20 leaders to impose a current account cap, such as a limit on how much countries should borrow from the rest of the world.

  The US had mounted a campaign, along with a handful of countries, to press for including such a cap in the final statement of position to be adopted by the G20. Both India and China resolutely opposed this move.

  "It is not easy to reach an agreement on what are sustainable current account balances for individual countries," Singh said. "It is even more difficult to agree on a particular combination of policies to achieve these targets."

  The final communiqué of the G20 upheld this assertion, which was wholly supported by Chinese President Hu Jintao and German Chancellor Angela Merkel.

  The day after Obama ended his three-day visit to India, on Wednesday, the Hindu Business Line, a leading economic newspaper, commented in an editorial that, "In the context of the G20 meeting later this week, India has agreed to bat for the US about China's exchange rate policy."

  However, Singh did not go along with the US at the summit, nor did India join the efforts of countries that came to Seoul with the sole agenda of forcing China to revalue the yuan.

Source: Global Times


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