News / Asia

Finance Ministers, Bank Governors Meet to Avert Currency War

South Korean police officers patrol at the Gimpo Airport in Seoul, South Korea.  South Korean police will go on high alert and mobilize a record 50,000 officers to thwart possible threats from North Korea. international terrorists and anti-globalization d
South Korean police officers patrol at the Gimpo Airport in Seoul, South Korea. South Korean police will go on high alert and mobilize a record 50,000 officers to thwart possible threats from North Korea. international terrorists and anti-globalization d
TEXT SIZE - +

Finance ministers and central bank governors from the 20 largest economies are gathering in South Korea as concerns grow about the possibility of a currency war.

Starting Friday, the economic policy makers of the top 20 economies will spend two days trying to reach agreements on the global financial system.

High stakes

Economics Professor Joshua Aizenman at the University of California-Santa Cruz says the meeting comes at a critical juncture.

"The stakes are too high to ignore the downside risk of a resumption of either more aggressive currency wars or maybe some steps that may lead then to retaliation and the beginning of trade wars," Aizenman said.

The world's three-largest economies - the United States, China and Japan - are entwined in terms of trade and investment.  But economists say the relationship is out of balance.  In part, the reason is that China's currency is significantly undervalued.  That gives Chinese exporters, their competitors say, an unfair advantage.

To protect their own export industries, Brazil, Japan and Thailand have taken steps to slow the appreciation of their currencies.  A number of other countries, including India and South Korea, are considering similar moves.

Is China to blame?

A U.S. Treasury Department senior official, without naming China, contends a large economy keeping its currency from rising "compels other countries to do the same" sparking what he terms "competitive non-appreciation."

China says America's economic problems are caused by Washington's policies and not the Chinese currency.

Professor Aizenman, the vice president of the Asia-Pacific Economic Association, says that in a globalized economy there is no way each of the G20 participants can push its own agenda without cooperation.

"So the key will be to find the proper compromise of each party without sacrificing the main agenda of each party," he noted, "but recognizing that trying to push a narrow agenda too aggressively will penalize everybody."

Compromise essential

Research fellow Kwak Soojong at the Samsung Economic Research Institute in Seoul says both Washington and Beijing appear ready for compromise.  He notes China's surprise interest rate hike this week as one sign of flexibility.

"Therefore I believe there is no reason that these two big countries do not agree upon the serious matters that the rest of the 18 member countries are looking upon," Kwak said. "I am kind of a positive man and I wish those two big countries will agree upon the currency issues."

The meetings here are a prelude to the G20 leaders' summit in Seoul next month.


Steve Herman

A veteran journalist, Steven L Herman is the Voice of America Asia correspondent.

You May Like

Multimedia Anti-Keystone XL Protests Continue

Demonstrators are worried about pipeline's effect on climate change, their traditional way of life, health and safety More

Thailand's Political Power Struggle Continues

Court gave Prime Minister Yingluck Shinawatra until May 2 to prepare her defense over abuse of power charges but uncertainty remains over election timing More

Malaysia Plane Search Tests Limits of Ocean Mapping Technology

Expert tells VOA existing equipment’s maximum operating depth is around 6 kilometers as operation continues on ocean bed for any trace of MH370 More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Pet Kangaroo Helps Spread Environmental Messagei
X
Penelope Poulou
April 22, 2014 5:53 PM
Children’s author Julia Heckathorn travels the world to learn about different ecosystems and endangered animals. She pours her knowledge into children’s books, hoping the next generation will right the environmental wrongs of our times. As in many children's books, the main character in Heckathorn's stories is an animal. Unlike those other characters, though, this one is real - a kangaroo, that lives in the author’s backyard. VOA’s Penelope Poulou has more.
Video

Video Pet Kangaroo Helps Spread Environmental Message

Children’s author Julia Heckathorn travels the world to learn about different ecosystems and endangered animals. She pours her knowledge into children’s books, hoping the next generation will right the environmental wrongs of our times. As in many children's books, the main character in Heckathorn's stories is an animal. Unlike those other characters, though, this one is real - a kangaroo, that lives in the author’s backyard. VOA’s Penelope Poulou has more.
Video

Video Pro-Russian Separatists Plan 'Federalization Referendum' in Eastern Ukraine

Pro-Russian separatists in eastern Ukraine say they plan to move forward next month with a referendum vote for greater autonomy, despite the Geneva agreement reached with Russia, the U.S. and Ukraine to end the political conflict. VOA's Brian Padden reports from the city of Donetsk in Eastern Ukraine.
Video

Video Pope Francis Hopes Dual Canonizations Will Reconcile Church

On April 27, two popes - John the XXIII and John Paul II - will be made saints in a ceremony at St. Peter’s Square. VOA religion correspondent Jerome Socolovsky says the dual canonization is part of the current pope’s program to reconcile liberals and conservatives in the Roman Catholic Church.
Video

Video In Capturing Nature's Majesty, Film Makes Case for Its Survival

French filmmaker Luc Jacquet won worldwide acclaim for his 2005 Academy Award-winning documentary "March of the Penguins". Now Jacquet is back with a new film that takes movie-goers deep into the heart of a tropical rainforest - not only to celebrate its grandeur, but to make the case for its survival. VOA's Rosanne Skirble reports.
Video

Video Boston Marathon Bittersweet for Many Runners

Monday's running of the Boston Marathon was bittersweet for many of the 36,000 participants as they finished the run that was interrupted by a double bombing last year. Many gathered along the route paid respect to the four people killed as a result of two bombings near the finish line. VOA's Carolyn Presutti returned to Boston this year to follow two runners, forever changed because of the crimes.
Video

Video International Students Learn Film Production in World's Movie Capital

Hollywood - which is part of Los Angeles - is the movie capital of the world, and many aspiring filmmakers go there in hopes of breaking into the movie business. Mike O'Sullivan reports that regional universities are also a magnet for students who hope to become producers or directors.
Video

Video Pacific Rim Trade Deal Proves Elusive

With the U.S.-led war in Iraq ended and American military involvement in Afghanistan winding down, President Barack Obama has sought to pivot the country's foreign policy focus towards Asia. One aspect of that pivot is the negotiation of a free-trade agreement among 12 Pacific Rim nations. But as Obama leaves this week on a trip to four Asian countries he has found it very difficult to complete the trade pact. VOA's Ken Bredemeier has more from Washington.
Video

Video Autistic Adults Face Housing, Job Challenges

Many parents of children with disabilities fear for the future of their adult child. It can be difficult to find services to help adults with disabilities - physical, mental or emotional - find work or live on their own. The mother of an autistic boy set up a foundation to advocate for the estimated 1.2 million American adults with autism, a developmental disorder that causes communication difficulties and often social difficulties. VOA's Faiza Elmasry reports.
AppleAndroid