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Clinton plays a wildcard in currency debate

HONOLULU (AsiaNews): United States of America (US) treasury secretary, Timothy Geithner, said Asia should do more to stimulate global growth to offset the Eurozone crisis, following a meeting of Asia-Pacific finance ministers in Honolulu, Hawaii, on November 8 in the run up to the start of the APEC summit.

“Asian economies will need to do more to stimulate growth of domestic demand,” Geithner said, if they want to avoid “the situation in Europe, and… continue to contribute to global growth.”

He added, “While the APEC economies are the most vulnerable to a global slowdown, they can also play the greatest role in contributing to a global recovery and establishing the foundations of strong, sustainable, and balanced future growth.”

AsiaNews claims that although the admonition was formally addressed to all participants, it was clearly directed at the Chinese president, Hu Jintao.

The artificially low yuan and the huge trade imbalance between China and the US are major causes of disagreement between the two countries, making Hu the odd man out at the summit.

However, “It seems that the current goals put out by the US side are too ambitious and beyond the reach of developing economies,” assistant foreign minister, Wu Hailong, said before Hu’s departure for Hawaii.

Beijing cannot boost domestic demand too much for fear of inflation, a problem in a country already shaken by about 100,000 episodes this year of social unrest related to expropriations and rising prices.

Hu also knows that China cannot revalue its currency, because it would lose its export dominance in the US and Europe. At the same time, the countries represented at the summit are so economically interconnected that no other path appears possible.

In order to highlight China’s conundrum, US secretary of state, Hillary Clinton, played a bit of a wildcard, introducing human rights out of leftfield.

“We are alarmed by recent incidents in Tibet of young people lighting themselves on fire in desperate acts of protest as well as the continued house arrest of the Chinese lawyer Chen Guangcheng,” she said. “We continue to call on China to embrace a different path.”

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