Substantial results expected at G-20 meet
By Liu Weiling (China Daily)
Updated: 2005-10-15 06:52

How can the world achieve balanced economic development? What kind of development aid and innovation finance mechanism should be set up? How to deal with an ageing society?

In Xianghe, a small town in Hebei Province that is a one-hour drive from Beijing, finance ministers and central bankers from the Group of 20 (G-20) gather on Saturday to discuss such issues crucial to a stable, orderly and healthy world economy.

Jin Renqing, Chinese finance minister who is to co-chair the meeting with China's central bank Governor Zhou Xiaochuan, said he expected the two-day meeting to yield "substantial" fruit.

"All the topics are key issues in current global economic development," Jin said in an exclusive interview with China Daily. "They concern whether, in a new world economic order, common prosperity can be established."

Meanwhile, Jin said the meeting will further promote exchange and co-operation amongst the world's major industrialized countries and developing nations in key international economic issues.

The world's economy faces major challenges nowadays, such as unbalanced growth, trade protectionism, an increasing ageing population, and energy price fluctuation. "But the challenges cannot be solved only by a small number of nations," Jin said. "To build a new, fair and reasonable international economic order, we need co-operation and participation of the whole community."

The theme of the meeting, "Enhancing Global Co-operation and Promoting Global Economic Development in Balance and Order," well reflects its significance.

Chinese President Hu Jintao is scheduled to address the opening ceremony Saturday morning in Beijing.

This is the seventh ministerial meeting of the G-20 and the first time for China to serve as host.

According to Jin, except for a regular joint communique, China plans to call on the other members to pass two documents, one on the reform of the Bretton Woods Institutions, and the other on issues of international development.

Two of the Bretton Woods Institutions, the International Monetary Fund (IMF) and the World Bank, are entering their 60s this year. As key pillars supporting the current world economic order, they have played a vital role in promoting sustained and stable economic growth globally.

But the changes in the world economic picture have brought many new challenges to the two institutions and calls to reform them in recent years.

Jin said such topics had already been heavily discussed in related seminars in a number of countries and two deputies' meetings earlier this year in Chongqing and Dalian.

"An initial consensus on the topics has been achieved among participating parties," Jin said.

"This lays a good foundation for the ministerial meeting to achieve expected results."

** China Sticks to Yuan Value

China will move to a market-driven currency system "only gradually" in order to preserve its economic stability and prevent regional and world economic disturbances, Jin Renqing said ahead of the meeting.

Jin said Thursday that China would only stick to its set pace of currency liberalization and refrain from rushing to another steep one-off yuan revaluation following the July 21 reform move.

Jin's comments underscored Beijing's resistance to pressure by the United States to revalue the yuan.

"Our hope is, first of all, to realize a manageable currency rate system based on the supply and demand of the market economy," Jin said after meeting with Gordon Brown, Britain's finance minister. "The goal is to maintain a stable currency rate system. We are moving toward that goal in steps," Jin said.

Brown gave praise for China's move on July 21 to raise the yuan's value by 2.1 percent against the dollar and to switch to a more flexible system that bases it on a basket of currencies, including the yen and euro. Since the July 21 measure, the yuan has gained  0.3 percent against the U.S. dollar.

"We welcome the progress to flexibility that has been made in China and note from the minister that it is the Chinese government's intention that this is the direction they want to move further to at a later stage," he said.

The Bush administration is anxious to do something about China's huge trade surplus with the U.S., which amounted to $162 billion in 2004. During the G-20 meeting, US Treasury Secretary Snow and other U.S. officials may well face criticism of the United States' massive trade and budget deficits.

"America knows it has got to deal with its deficit problems so that it, too, can promise it is making its proper and best contributions to the world economy," Brown told reporters.

The G-20 nations account for 90 percent of global gross domestic product, 80 percent of global trade and two-thirds of the world's population.

They include the Group of Seven industrialized nations as well as the European Union, China, Argentina, Brazil, Russia, India, Australia, Mexico, the Republic of Korea, Indonesia, Saudi Arabia, South Africa and Turkey.