* China tells U.S. trade targets smack of central planning
* German finance minister says Fed policy "clueless"
* China tells U.S. trade targets smack of central planning
* Merkel to address U.S. money policy at G20 summit
* Obama says U.S. global economic leadership at risk
(Recasts first paragraph; adds comments by Brazil's Meirelles,
Fed's Bernanke, details throughout)
By Glenn Somerville and Zhou Xin
WASHINGTON/BEIJING, Nov 5 Global anger at a
fresh round of liquidity injections into the U.S. economy
swelled on Friday as Germany called the move "clueless" and
emerging nations protested that it will wreak havoc on them.
Harsh criticism poured in as President Barack Obama headed
for Asia on a trip he had hoped to use as a springboard for
pressuring China to revalue its yuan but may end up in a
fractious Group of 20 leaders summit next week.
The United States has been pressing China, largely
unsuccessfully, to let its yuan currency rise more quickly to
reflect the strength of what is now the world's second-largest
economy and help correct global trade imbalances.
The Federal Reserve's decision this week to buy $600
billion in long-term bonds with new money to try to revive the
flagging U.S. economy have increased fears of more money
pouring across borders in search of better returns.
China landed its own blows by saying a U.S. proposal for
numerical targets for surpluses and deficits -- akin to a range
for yuan appreciation -- smacked of outmoded central planning
that won't win any friends for the United States.
Chinese Vice-Foreign Minister Cui Tiankai, who is China's
chief G20 negotiator, told a news briefing that he was also
worried at the prospect of a flood of money pouring into global
markets in search of higher yields.
"They owe us some explanation," Cui said. "I've seen much
concern about the impact of this policy on financial stability
in other countries."
Special report: Fed's big gamble: r.reuters.com/cyh73q
Charting G20 economies: r.reuters.com/men39p
FED LIQUDIDITY CREATING PROBLEMS IN OTHER COUNTRIES
A "common theme" is emerging that "excess liquidity in the
U.S. is creating problems in other countries," Brazil's Central
Bank Governor Henrique Meirelles told reporters in Chicago.
Resentment abroad stems from worry that Fed pump-priming
will hasten the U.S. dollar's slide and cause their currencies
to shoot up in value, setting the stage for asset bubbles and
making a future burst of inflation more likely.
"With all due respect, U.S. policy is clueless," German
Finance Minister Wolfgang Schaeuble told a conference.
"(The problem) is not a shortage of liquidity. It's not
that the Americans haven't pumped enough liquidity into the
market, and now to say let's pump more into the market is not
going to solve their problems."
Fed Chairman Ben Bernanke, speaking to students in Florida,
seized the opportunity to defend the move by saying "a strong
U.S. economy, a recovering economy, is critical, not just for
Americans but it's also critical for the global economy."
New U.S. unemployment figures on Friday, showing a
surprisingly strong 151,000 jobs were created in October,
caused some analysts to question whether the Federal Reserve's
pledge to buy up to $600 billion of Treasury securities was
But with a jobless rate stuck at 9.6 percent, few doubted
the Fed will proceed with buying.
German Chancellor Angela Merkel will address U.S. policy in
Group of 20 discussions on exchange rates, a government source
said, adding that she shared Schaeuble's criticism.
Policymakers from the world's new economic powerhouses in
Latin America and Asia have said they would consider fresh
steps to curb capital inflows after the Fed's move.
South African Finance Minister Pravin Gordhan said Fed
policy "undermines the spirit of multilateral cooperation" that
the G20 had sought to achieve. The money will find its way into
financial markets of emerging nations with potentially
devastating impact on their exports, he charged.
Zhou Xiaochuan, China's central bank governor, said while
Beijing could understand that the Fed was implementing more
monetary easing in order to stimulate U.S. recovery, it may not
be a good policy for the global economy.[ID:nBGN5ME61T]
Before he left on an Asian trip that will take him to the
G20 gathering next week, President Barack Obama said a
dramatically realigned political landscape in the United States
called for cooperation at home because U.S. global economic
leadership was at stake.
"We can't spend the next two years mired in gridlock,"
Obama said in a reference to the outcome of mid-term elections
that put Republicans in control of the U.S. House of
representatives. "Other countries, like China, aren't standing
still. So we can't stand still either."
Efforts to reduce imbalances that are destabilizing the
global economy will top the agenda of the Nov. 11-12 summit of
the Group of 20 forum of leading economies in Seoul.
China and Germany oppose a plan floated by U.S. Treasury
Secretary Timothy Geithner last month to cap current account
surpluses and deficits at 4 percent of gross domestic product.
"Of course, we hope to see more balanced current accounts,"
Chinese Vice-Foreign Minister Cui Tiankai told a news briefing.
"But we believe it would not be a good approach to single out
this issue and focus all attention on it. The artificial
setting of a numerical target cannot but remind us of the days
of planned economies."
Cui, China's chief G20 negotiator, also rejected any
attempt to set target ranges for the yuan to appreciate.
"That would indeed be asking us to manipulate the ...
exchange rate, and it is something that we will of course not
do," Cui said.
The Asia-Pacific Economic Cooperation (APEC) forum in
Kyoto, which Geithner will attend, will also provide an
opportunity for emerging economies to voice their views of the
(Additional reporting by Annika Breidthardt in Berlin;
Writing by Glenn Somerville, Alan Wheatley and Mike Peacock)