The G20 leaders, representing both the world’s established economic giants and its dynamic emerging powers, agreed to a package of measures to cut deficits, stimulate growth and return stability to financial markets. But Obama went further than the carefully worded joint statement, using his post-summit press conference to remind China that the United States expects it to allow its currency to rise and to reduce its huge trade surplus. “My expectation is that they’re going to be serious about the policy that they themselves have announced,” Obama said on Sunday, welcoming China’s announcement last week that it will allow more flexibility in the yuan exchange rate.
As the world limps out of the worst recession since the 1930s, American policymakers fear the recovery will revive the one-sided trade across the Pacific in Chinese goods kept cheap by the low level of the yuan.
Published in The Express Tribune, June 29th, 2010.
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