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Geithner keeps pressure on China after G20 finance meeting

US Treasury Secretary Timothy Geithner is keeping the pressure on China, after finance ministers meeting in South Korea this weekend seem to have staved off the immediate threat of a 'currency war.'

By Donald KirkCorrespondent / October 24, 2010

U.S. Treasury Secretary Timothy Geithner speaks at a press conference during the G20 Finance Ministers and Central Bank Governors meeting at a hotel in Gyeongju, South Korea, Saturday.

Ahn Young-joon/AP


Gyeongju, South Korea

US Treasury Secretary Timothy Geithner is keeping up the pressure on China to raise the value of its currency and lower its enormous exports after the world’s top finance officials failed to make definite commitments in two tense days of talks here.

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In negotiations that went far into early hours Saturday, finance ministers and central bank officials from 19 countries and the European Union settled for a final communiqué promising to “refrain from competitive devaluation of currencies” – that is, not to lower exchange rates in order to undersell competitors in foreign markets.

Mr. Geithner promptly followed up the talks with his G20 colleagues by flying to the Chinese coastal city of Qingdao for an unexpected meeting with China’s top finance official, Wang Qishan, vice premier in charge of economic affairs. Their rendezvous Sunday at the Qingdao airport was reportedly brief, however, and was not believed to have gone further than the wording of the communiqué that wound up the talks here.

All a US Embassy official in Beijing would say is that the two “exchanged views” and also talked about the next major event in trying to resolve global imbalances at the summit of G20 leaders, including President Obama and China’s President Hu Jintao, in Seoul on Nov.11-12. The meetings here were a prelude to that event – a table-setter in which ministers sought to reach basic understandings that heads of state will confirm in an “action statement” in which they will wind up the summit.

Geithner rebuffed ...

Geithner was rebuffed at the outset when his counterparts from countries ranging from Germany to Japan, from India to Russia, poured cold water on his proposal for restricting current accounts surpluses to 4 percent of gross domestic product (GDP). In other words, he wanted every country to promise that the net balance from trade, transfers of money from abroad, and interest and dividend payments would remain within that band.