PARIS Oct 14 China will not commit to a quick
liberalisation of its yuan currency to help rebalance global
growth, at a meeting of G20 financial leaders, but will offer to
use expansionary fiscal policy to fuel domestic demand, a G20
official said on Friday.
Finance ministers and central bankers from the world's 20
biggest developing and developed economies (G20) meet in Paris
on Friday and Saturday to discuss, among other things, ways to
rebalance growth between the world's economic powers.
China's control over the exchange rate of its currency is
seen by many G20 countries as one of the key reasons for global
trade and savings imbalances.
The United States and Europe have long called for Beijing to
free the yuan, which China says it would do, but only over the
medium term, without giving any dates.
The European Union wanted China to agree to a road map of
making the yuan fully convertible in a bid to elicit some
commitment to dates, but the efforts failed.
"No, they were pretty firm on that -- there will be no
progress," one G20 official said of talks with China.
"They say their contribution to global growth in the
short-term will be to ensure that growth in China does not slow
down, even if they face the risk of inflation, through
expansionary fiscal policy," the official said.
"They always say that over the medium term they will make
their currency fully convertible and free the exchange rate, but
there will not be anything now," the official said.
Another G20 source said after preparatory talks late on
Thursday that China would commit in Paris to boost its
consumption through a five-year plan, via households and
companies as well as infrastructure.
China and the United States sparred this week over a U.S.
Senate bill to press Beijing to raise the yuan's value.
China's trade surplus narrowed for a second straight month
in September, to $14.5 billion, with both imports and exports
lower than expected, reflecting global economic weakness and
domestic demand cooling.
Meanwhile, data released in Washington gave new ammunition
to U.S. lawmakers pressing for legislation to crack down on
Chinese currency practices that they blame for millions of lost
The U.S. Commerce Department said the U.S. trade deficit
with China rose to a record $29.0 billion in August as imports
grew 6.4 percent to $37.4 billion. The trade gap with China
totaled $189.3 billion through the first eight months of the
year, on pace to surpass last year's record of $273 billion.