US President Barack Obama has launched a stern challenge to China, using the big stage of the G20 summit of world powers to demand Beijing’s help in rebalancing the world economy.
The G20 leaders, representing both the world’s established economic giants and its dynamic emerging powers, agreed a package of measures to cut deficits, stimulate growth and return stability to financial markets.
However, Obama went further than the carefully worded joint statement, using his post-summit press conference to remind China that the US 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 would allow more flexibility in the yuan exchange rate.
As the world limps out of the worst recession since the 1930s, US 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.
“After years of taking on too much debt, Americans cannot — and will not — borrow and buy the world’s way to lasting prosperity,” the president said in an implicit swipe at export-led economies such as China and Germany.
“No nation should assume its path to prosperity is paved with exports to America. Indeed, I’ve made it clear that the United States will compete aggressively for the jobs and industries and markets of the future,” he said.