HONG KONG: World leaders are struggling to regain the sense of purpose that drove their determined response to the worst financial crisis in decades as they head to economic summits in Asia this week. Forged in the heat of a banking meltdown two years ago, summits of the Group of 20 advanced and emerging economies have turned their attention to the slower-burning problem of imbalances that bedevil global growth. Talk of a “currency war” – when countries jostle for trade advantage by massaging their exchange rates lower – has diminished since G20 finance ministers last month vowed to avoid forex one-upmanship. But US President Barack Obama, weakened by a mid-term electoral drubbing last week, and other leaders must still flesh out a ministerial vow to limit surpluses and deficits in current accounts – the broadest measure of trade. Heading into the fifth G20 summit this Thursday and Friday in South Korea, China lashed out at a US proposal to set a current account ceiling – the suggested range is plus or minus four percent of gross domestic product. “We believe a discussion about a current account target misses the whole point,” Vice Foreign Minister Cui Tiankai, China's top negotiator on G20 issues, said last week. “If you look at the global economy, there are many issues that merit more attention – for example, the question of quantitative easing,” he said. There has been grumbling worldwide after the Federal Reserve said it would pump an extra $600 billion into the fragile US economy, in a radical policy approach known as “quantitative easing”. Emerging economies worry that much of the new US money will flood their financial markets, driving their currencies still higher against the dollar and Chinese yuan to the detriment of their exports. Brazilian Finance Minister Guido Mantega said the Fed's response was no better than “throwing money from a helicopter”. – Agence France
