G-20 Leaders Fail to Back U.S. Plan on Chinese Currency
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The leaders of the 20 major economies failed to back a U.S. plan intended to push China to let its currency strengthen. The leaders released a statement saying all the countries pledged to avoid "competitive devaluation" of currencies, The Associated Press said.
Governments usually institute competitive devaluation -- the sudden reduction in the value of a currency -- only during a crisis. As a result, the pledge is of little value in the current dispute between the U.S. and China, which has been building for years, because competitive devaluation isn't exactly the issue now.
Instead, the U.S. had pushed for a pledge to refrain from "competitive undervaluation," but G-20 leaders refused to endorse this wording. The U.S. claims that China is keeping the value of its yuan currency artificially low, giving Chinese goods an unfair advantage in world trade. The U.S. has called on China to let the yuan appreciate more quickly.
At the same time, countries including China, Germany and Brazil have criticized the U.S. Federal Reserve's decision to buy more than $600 billion of long-term assets, saying the move will weaken the dollar and hurt the global economy. The G-20