Economic officials from the world's major developed and developing nations gathered Saturday, starting to discuss the future of global cooperation.
Addressing the opening ceremony of the G-20 Finance Ministers and Central Bank Governors Meeting in Beijing, Chinese President Hu Jintao called for strengthening global cooperation to promote common development.
"On the one hand, peace and development remain the theme of our times. Economic globalization is going to greater depth," he said.
"At an amazing speed, modern science and technology have been making continuous progress that is marked by the advancement of information technology and bio-technology. And international industrial transfer as well as the flow of production factors have accelerated. All this offers countries in the world rare opportunities for development," Hu said.
On the other hand, however, the global problem of uneven development is increasingly salient as the gap between the North and South is further widening. There are financial turbulences from time to time and new manifestations of trade barriers and protectionism, the Chinese leader said.
"Facing all this, we must strengthen international cooperation to seize opportunities and meet challenges together so as to promote balanced and orderly development of the world economy."
Hu's remarks were echoed by the International Monetary Fund (IMF) Managing Director Rodrigo de Rato. "Despite the broadly satisfactory prospects for the global economy, there are risks to growth stemming from higher oil prices," he said.
Oil producers can begin to increase investment in new facilities, while oil-consuming countries need to start increasing refining capacity and to take measures to curb oil demand, such as improving conservation and energy efficiency, he said.
Rato pointed out that a second major risk comes from global imbalances. He said the symptoms of these are high current account deficits and rapidly increasing debt in the United States, and corresponding surpluses in Japan, China, and many other Asian emerging market economies, and increasingly oil-producing countries, including Russia as well as countries of the Middle East.
These imbalances pose serious risks to prosperity, because they are clearly unsustainable, and if they are corrected in a disorderly way, through an abrupt decline in the US dollar and rise in US interest rates, growth and prosperity all over the world will be threatened, he said.
China's currency remains a hot topic. "We welcome the change in China's exchange rate arrangement announced in July as an important move toward greater exchange rate flexibility," the IMF said in a statement.
It said that greater flexibility is in China's best interest as it will provide more room for monetary independence and help to insulate the economy from shocks. "We encourage China to fully utilize the flexibility afforded by the new arrangement."
But Chinese Premier Wen Jiabao has reiterated that the reform of the renminbi exchange rate mechanism should be "gradual". He told Rato that to gradually establish a managed, floating exchange rate system based on market supply and demand and to keep the yuan basically stable at a reasonable and balanced level is the "unalterable direction" and goal of China's exchange rate reform.
Finance Minister Jin Renqing put it in a more direct way, saying that the yuan appreciation would not remove economic imbalances of the world, especially of certain nations, and that China will not follow the "orders" of others to conduct the exchange rate reform.
"We will only discuss issues that China hopes to discuss," he said.
Some developed countries, typically the United States, contend that the yuan was undervalued by as much as 40 percent, giving Chinese exporters an "unfair" advantage. They contend that the recent 2 percent rise in the yuan's value is too small.
Participants of the G-20 meeting plan to exchange views on the "problem of ageing and immigration" and "conceptual innovation of development" Sunday. The meeting is to end at noon Sunday after a joint communiqué is released.
Established in 1999, the G-20 Group includes major industrial nations and emerging market countries that account for over 90 percent of the world 's combined gross domestic product (GDP) and 80 percent of global trade.
(Xinhua News Agency October 16, 2005)
