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Asian Countries: Trade Imbalances Risky


Asian countries have expressed concern that global trade imbalances could adversely impact the buoyant growth witnessed by many countries in the region. They want developed countries to do more to address the issue. These countries are also calling for swift action to stabilize high oil prices.

Top finance policymakers from Asian countries warned Thursday that global trade imbalances have the potential to destabilize economies around the world, and must be fixed quickly.

The officials met in the southern Indian city of Hyderabad, where the Asian Development Bank is holding its annual conference.

China is at the heart of the debate, accused of keeping its exchange rate unfairly cheap and pushing its exports even higher.

Chinese representatives said trade imbalances present a problem, but indicated that there would be no quick reform of its tightly managed currency.

Chinese Vice Finance Minister, Li Yong, called on developed countries to do more to address the problem.

"Share the responsibility," he said. "I think we are all on the same boat and none will escape if this boat sank, so major developed countries should take more responsibility."

China said it is acting responsibly, and its move in revaluing the yuan last year by about two percent reflected Beijing's willingness to address the problem.

The United States called for the International Monetary Fund to take on a greater role in managing currency rate fluctuations.

U.S. Treasury Under Secretary, Timothy Adams, said there was no quick solution to the problem of trade imbalances, but hoped it would not cause major economic disruptions.

"It took us a long time to get here, and it will probably take us a long time to get out of them, but there is no reason to believe these adjustments cant be smooth and orderly," he said.

Top economic policy makers from East Asian countries say they expect the region to sustain its growth momentum, but warn that high oil prices, rising global interest rates and a potential avian flu epidemic could pose risks to their economies. They want for quick action to stabilize the volatile oil market and say there is need for dialogue between oil producing and consuming nations.

These countries say they will put in place an early warning system to detect an impending financial crisis. The financial crisis that hit East Asia in the late nineties had dragged down growth and rippled through the globe.

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