G20 Members Promise To Avoid "Currency War" &Nbsp; &Nbsp; To Cooperate And Not To Fight.

For two days.

The recent "currency war" is widespread in the world. Therefore, discussions and conclusions about the exchange rate are one of the most anticipated expectations of the summit.

From the information available at present, countries at least agree in principle to avoid confrontation on the exchange rate issue.

The Seoul declaration issued after the meeting declared that members of the G20 group promised to take macro control measures to ensure the stability of the financial market, adopt a monetary policy to maintain price stability and promote economic recovery, and adopt more market determined exchange rate policies reflecting the fundamentals of the economy so as to avoid competitive devaluation measures.

Developed economies, especially the major reserve currency issuing economies, should be vigilant against excessive liquidity risks and disorderly fluctuations in exchange rates.

"At least for now, the threat of the so-called currency war is no longer there."

Lee Myung-bak said at a press conference on 12.

On the same day, German finance minister Schauble also said that doubts about currency war had "dissipated".

According to local media quoted an American official, the meeting also reached a consensus on exchange rate, that is, the adjustment of exchange rate policy will be pushed forward step by step.

Some US officials attending the meeting said the United States felt "encouraged" about China's exchange rate reform.

Before the summit, the United States frequently put pressure on China on the issue of exchange rate, and implied that China's exchange rate policy was a factor contributing to global imbalances.

But this argument was strongly refuted by the Chinese side.

During the summit, Chinese officials said that global economic imbalances are an objective reflection of the process of economic globalization. They are related not only to industrial pfer and capital flows, but also to imbalances in trade, imbalances in monetary systems and improper macroeconomic policies in some developed countries.

US policy is alleged to have "shortcomings".

On the contrary, the US policy has been widely criticized by the countries attending the summit.

Even IMF also said that the latest economic policies in the United States had "shortcomings".

Earlier this month, the Federal Reserve launched a new round of $600 billion asset acquisition plan.

But it is widely believed that such a move can not pull the US economy at all, but it may bring many side effects to the world, such as intensifying the influx of hot money into emerging markets, pushing up asset prices and inducing exchange rate fluctuations.

Brazil President Rousseff, who attended the summit, publicly criticized the new round of quantitative easing policy in the United States. Rousseff said that the implementation of the weak dollar policy in the United States is harmful to the whole world, which will lead to the rise of protectionism.

Forced by the influx of hot money, the Brazil government has announced heavy taxes on investment in fixed income assets to avoid currency appreciation.

The Brazil government has repeatedly criticized the US for stimulating exports by deliberately underestimating the dollar, and "disguised" to raise the prices of imported goods.

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Kahn, President of IMF, pointed out on the 12 day that the Fed's new round of quantitative easing measures is "right in direction", but it does not mean there is no "shortcoming".

Recently, IMF and the world bank have repeatedly warned that quantitative easing in the US could lead to asset bubble risks in emerging markets.

The statement of the summit also pointed out that the emerging economies with excessive pressure on hot money can take regulatory measures to deal with them.

During the summit, China emphasized that the main reserve currency issuing economies should implement responsible policies, maintain relatively stable exchange rates, enhance the ability of emerging market countries and developing countries to cope with financial risks, and mitigate and gradually solve the fundamental contradiction resulting in the risk of foreign exchange liquidity.

Developing early warning indicators for crisis

Experts believe that one of the biggest achievements of this summit is the recognition of the importance of policy coordination, which is also considered to be the greatest threat to the current world economy.

At the summit, Chinese President Hu Jintao pointed out that the world economy is slowly recovering, but the total demand is still insufficient and there is no new economic growth point.

The economic policy objectives of different countries are different, the coordination of macroeconomic policies is more difficult, and the fragility and imbalance of the world economic recovery are further apparent.

To this end, China proposes to improve the framework mechanism and promote cooperation and development.

Specifically, first, we should continue to adhere to the principle of member state leadership, take full account of the different national conditions and stages of development of different countries, understand and respect the autonomy of all countries in choosing development paths and development policies; two, we need to improve the framework so as to pform the framework from short-term contingency to long term governance, strengthen the long-term policy coordination among countries, and promote the complementary and mutually beneficial growth of economic advantages of all countries.

According to the statement after this meeting, all countries have unanimously recognized that unbalanced growth and growing imbalances are prompting national actions to deviate from the global agreements, separate their own affairs, and lack of coordinated global policy actions, which will only lead to the development of the world economy in a bad direction.

According to the statement, the G20 finance minister will start working out a set of so-called "reference standards" next year as an early warning indicator to identify major imbalances in the global economy and to suggest measures to be taken.

Morgan Stanley's non executive chairman of Asia, Roach, points out that the agreement reached by G20 will help shift the focus from bilateral exchange rate issues. He believes that this is a more feasible framework to solve global imbalances, which will constrain all G20 members and require countries to take measures to limit their trade and savings imbalance.