WRAUP 2-U.S.-China step back from tussle on economic policy

* China gives some supports for U.S. quantitive easing

* Geithner says no plans for immediate targets on imbalances

* Japan says progress made

(Adds comment by Noda)

By Chris Buckley and Stanley White

KYOTO, Japan, Nov 6 (BestGrowthStock) – The United States and China
on Saturday appeared to take a step back from mounting criticism
of each other’s economic policies, but Beijing made clear it was
still wary of Washington’s latest move to print more money.

The less confrontational tone emerged after a two-day meeting
of Asia Pacific finance ministers who gave their backing to last
month’s Group of 20 agreement to shun competitive currency
devaluations and be vigilant against volatile exchange rate

The meeting in the ancient Japanese capital Kyoto came amid
growing criticism from a number of countries, notably China and
Germany, of U.S. monetary policy and its proposals to solve
economic imbalances.


For more on APEC finance ministers’ meeting [ID:nTOE6A405J]

Graphics on currencies, trade and monetary policy:


G20 graphic: http://link.reuters.com/men39p

Text of G20 October communique [ID:nTOE69M01E]


However, China’s Vice Finance Minister Wang Jun voiced some
support for quantitive easing by the United States to help boost
its economy.

“And boosting the U.S. economy will play an important role in
global economic recovery,” he told reporters.

But he added: “At the same time, the quantitative easing
policy has already prompted the concern of emerging nations, and
we will continue paying attention to the implementation of this

In a clear reference to the United States, which this week
announced it would inject an extra $600 billion into its banking
system, Wang warned major economies to refrain from excessive
issuance of currency.

A number of other leading economies have warned against the
latest U.S. moves to lift its economy.

Brazil’s central bank head Henrique Meirelles said on Friday
that the U.S. Federal Reserve’s decision to increase Treasury
purchases to boost the economy risked creating asset bubbles

The Brazilian finance minister’s warning of a “currency war”
in September captured the frustration many policymakers have over
the dollar’s steady decline and the appreciation in their own
currencies due to ultra-easy U.S. monetary policy.

German Finance Minister Wolfgang Schaeuble went further by
saying U.S. monetary policy was “clueless.”

Federal Reserve Chairman Ben Bernanke has defended the move
to buy $600 billion of government debt by saying that boosting
the U.S. economy is important for global growth.


The talks in Kyoto come ahead of a meeting of G20 leaders in
Seoul on Nov. 11-12, who will be trying to resolve at least some
of their difference over how best to reduce the imbalances that
are destabilising the world economy.

The United States has suggested setting numerical targets for
capping current account surpluses and deficits, something Beijing
has called outmoded central planning.

But U.S. Treasury Secretary Timothy Geithner denied any
immediate plans to seek rigid targets to deal with imbalances.

“It’s very hard to reduce a very complicated question to a
single number or a single indicator,” he said.

“What we proposed at G20 (last month in South Korea) and
talked about today was how to build a framework for cooperation
that will reduce the risk that future growth is imperilled by the
remergence of large external imbalances.

The United States has proposed limiting current account
surpluses to encourage exporters, particularly China, to
contribute to rebalancing growing by reducing their reliance on
external demand.

“The common foundation is being built for countries to
address external imbalances, whether they be current account
surplus or deficit, as well as stability of the global currency
system,” Japanese Finance Minister Yoshihiko Noda said.

“We didn’t talk about detailed numbers today, but we agreed
to continue to debate in a more specific way to make this work. I
think that is progress.”
(Additional reporting by Kaori Kaneko, Stanley White, David
Lawder, Chris Buckley; Writing by Jonathan Thatcher; Editing by
Ed Davies)

WRAUP 2-U.S.-China step back from tussle on economic policy