After The G20 Finance Ministers Meeting, The Global Exchange Rate Still Faces Challenges.

The meeting of G20 finance ministers and central bank governors ended in Qingzhou, Korea on 23 May. The consensus reached was: reducing the "disorderly fluctuation" of the exchange rate, "avoiding competitive depreciation" and promoting the current account balance. IMF will shift more than 6% of its share to the underrepresented countries by 2012. European countries will give up two seats for the Executive Board of IMF to the developing countries.

Because of its revised agenda, the conference focused on exchange rate issues and attracted much attention.

There are three of the twenty most attractive topics for the financial giants of Qingzhou.

First, how much can the newly emerging countries, including China, improve their position in IMF? Is this related to the future trend of RMB exchange rate?

As Zhou Xiaochuan, President of the Central Bank of China, said in his speech at the meeting, as the largest developing country and the largest share of undervalued countries, China's share and voice in the IMF should be greatly improved. Lu commissar believes that 6 percentage points do not match the contribution of emerging economies in the current global recovery, and that it is not enough to achieve the "public expectations" of China's top three in IMF and 6 percentage points.

There is a view that China needs to expand.

He cautioned that, in fact, the increase in the share of IMF in emerging countries is an inevitable interest, not a handout, nor a pfer from the emerging countries to the rights and interests. It is even more meaningless to "rely on the appreciation of the Renminbi for a share". On this issue, China should stick to its stand.

Secondly, can "avoid competitive devaluation" restrict the US dollar? "The exchange rate issue is a topic that all countries want to talk about. The pressure is not only on the renminbi, but also in the current depreciation of the dollar," said Lu Commissar.

In the US, the expansion of the domestic market and the depreciation of the US dollar have also pushed the other countries to tighten up through IMF, so as to shift the pressure and cost of the financial crisis. This unilateralism has aroused global criticism.

He believes that "avoiding competitive devaluation" can only be said to be an agreement, and whether the United States will follow suit in the future and wait for the consequences.

Thirdly, on the issue of exchange rate, the United States proposed the specific control index to set up the current account surplus.

In fact, the pressure of exchange rate appreciation by countries such as the US and other countries with trade deficits to China's trade surplus countries is also one of the sources of this exchange rate war.

The United States proposed that the current account surplus or deficit should be accounted for by the media, the political commissar said.

What is the effect of the twenty heads of state of Finance in Qingzhou? What's the effect after that? Lu commissar believes that the meeting still has "essential differences" under the "surface compromise", and the friction will still exist in the future. The global exchange rate problem is still full of challenges ahead.