APEC finance ministers on Friday ended a two-day meeting here during which they got a concession from China that it might break the link between its currency, the yuan, and the US dollar.
The meeting of APEC officials ended in the Chilean capital with a statement by the 21 ministers calling for currency deregulation that particularly targeted the yuan's much-criticized monetary peg to the US dollar.
PHOTO: EPA
The yuan has been fixed at 8.28 to the dollar for the past 10 years. With the Chinese economy so strong, this has given Chinese exporters a major advantage on world markets.
Critics, especially in the US, say this has led to unfair trade imbalances in China's favor.
"Ministers welcome steps being taken at the regional and national levels to develop capital markets and strengthen banking systems, which would over time facilitate freer and more stable capital flows and the choice to move to an exchange rate regime with greater flexibility, in some economies, if they deem appropriate," the statement said.
"I was particularly pleased that support for the move to more flexible currency regimes was expressed," US Treasury Undersecretary John Taylor said.
At their meeting last year in Thailand, APEC finance ministers were unable to come up with an agreed formula to criticize fixed currency regimes used by China and other countries in the region.
The finance ministers in their closing statement on Friday cited the "growing importance" of money sent home by immigrant workers as "a steady source of financial flows that can benefit emerging markets."
They called for "continued work on analyzing and reducing the institutional and regulatory impediments to remittance flows."
They applauded the "strength-ening" rate of growth in Asia-Pacific economies and the "continued favorable outlook for 2005, notwithstanding the risks associated with high oil prices."
"We stress the important fact that investment and trade are the leading factors behind the global economic recovery," the statement said. "In our view, both factors are crucial for stronger and broader based growth and for spreading the benefits of globalization."
The ministers set their next meeting for September next year in Jeju, South Korea.
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