Asia-Pacific leaders including US President Barack Obama and Chinese President Hu Jintao vowed on Sunday to reject trade protectionism and to pursue a new model for economic growth after the world's most severe economic crisis in decades.
REUTERS - U.S. President Barack Obama said on Sunday the world economy was on a path to recovery but warned that failure to re-balance the global economic system would lead to further crises.
Obama was addressing Asia Pacific leaders in Singapore, where officials removed any reference to market-oriented exchange rates in a communique after disagreement between Washington and Beijing over the most sensitive topic between the two giants.
The statement from the Asia Pacific Economic Cooperation (APEC) forum endorsed stimulus measures to keep the global economy from sliding back into recession and urged a successful conclusion to the Doha Round of trade talks in 2010.
An earlier draft pledged APEC's 21 members to maintain "market-oriented exchange rates that reflect underlying economic fundamentals".
That statement had been agreed at a meeting of APEC finance ministers on Thursday, including China, although it made no reference to the Chinese yuan currency.
An APEC delegation official who declined to be identified said debate between China and the United States over exchange rates had held up the statement at the end of two days of talks.
That underscored strains likely to feature when Obama flies to China later on Sunday after Washington for the first time slapped duties on Chinese-made tyres.
Beijing fears that could set a precedent for more duties on Chinese goods that are gaining market share in the United States.
Obama told APEC leaders the world could not return to the same cycles of boom and bust that sparked the global recession.
"We cannot follow the same policies that led to such imbalanced growth. If we do, we will continue to drift from crisis to crisis, a failed path that has already had devastating consequences for our citizens, our businesses, and our governments," Obama said.
"We have reached one of those rare inflection points in history where we have the opportunity to take a different path -- to pursue a new strategy for jobs and growth. Growth that is balanced. Growth that is sustainable."
Obama's strategy calls for America to save more, spend less, reform its financial system and cut its deficits and borrowing. Washington also wants key exporters such as China to boost domestic demand.
YUAN ON THE AGENDA
Chinese President Hu Jintao has been under pressure to let the yuan appreciate, but in several speeches at APEC he ignored the issue and focused instead on what he called "unreasonable" trade restrictions on developing countries.
One of the key themes when Obama visits China for three days will be the yuan, which has effectively been pegged against the dollar since mid-2008 to cushion its economy from the downturn.
Washington says an undervalued yuan is contributing to imbalances between the United States and the world's third-biggest economy. China is pushing for U.S. recognition as a market economy and concessions on trade cases that would make it harder for Washington to take action against Chinese products.
China's central bank said last week it will consider major currencies in guiding the yuan, suggesting a departure from the peg.
Obama arrived in Singapore late on Saturday, missing most of that day's formal talks and speeches where several leaders suggested the world's largest economy was hampering free trade through policies such as "Buy America" campaigns.
APEC is the last major gathering of global decision-makers before a U.N. climate summit in Copenhagen in three weeks meant to ramp up efforts to fight climate change.
Those negotiations have largely stalled, but a U.S. official said Obama had backed a two-step plan by the Danish prime minister to aim for an operational agreement and to leave legally binding details until later.
The APEC statement dropped all references to emissions reductions that had been in earlier drafts.
Date created : 2009-11-15