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China and Germany criticise US stimulus programme | |
(about 3 hours later) | |
Germany and China have expressed concerns over US plans to pump $600bn (£373bn) into the US economy. | Germany and China have expressed concerns over US plans to pump $600bn (£373bn) into the US economy. |
German Finance Minister Wolfgang Schaeuble said the US would not solve its problems, but create "extra problems for the world" instead. | German Finance Minister Wolfgang Schaeuble said the US would not solve its problems, but create "extra problems for the world" instead. |
Some countries fear that the US Federal Reserve's move could hurt their exports by making their currencies stronger. | Some countries fear that the US Federal Reserve's move could hurt their exports by making their currencies stronger. |
China's Central Bank head Zhou Xiaochuan urged a reform of the international currency system. | China's Central Bank head Zhou Xiaochuan urged a reform of the international currency system. |
He did not elaborate how the system should be changed. | He did not elaborate how the system should be changed. |
The US central bank announced on Wednesday that it would spend $600bn to buy government bonds, in the hope that the cash injection can kickstart the country's economy. | The US central bank announced on Wednesday that it would spend $600bn to buy government bonds, in the hope that the cash injection can kickstart the country's economy. |
However, this weakens the dollar, boosting US exports while making imports more expensive. | However, this weakens the dollar, boosting US exports while making imports more expensive. |
'Clueless' | 'Clueless' |
"If the domestic policy is optimal policy for the United States alone, but at the same time it is not an optimal policy for he world, it may bring a lot of negative impact to the world," said Mr Zhou. | "If the domestic policy is optimal policy for the United States alone, but at the same time it is not an optimal policy for he world, it may bring a lot of negative impact to the world," said Mr Zhou. |
"There is a spill over." | "There is a spill over." |
China's Vice Foreign Minister Cui Tiankai said the Federal Reserve had the right to take steps without consulting other countries beforehand, but added: "They owe us some explanation." | China's Vice Foreign Minister Cui Tiankai said the Federal Reserve had the right to take steps without consulting other countries beforehand, but added: "They owe us some explanation." |
Germany's finance minister Wolfgang Schaeuble said on German television that "with all due respect, US policy is clueless." | Germany's finance minister Wolfgang Schaeuble said on German television that "with all due respect, US policy is clueless." |
"It is not that the Americans have not pumped enough liquidity into the market and now to say let's pump more into the market is not going to solve their problems." | "It is not that the Americans have not pumped enough liquidity into the market and now to say let's pump more into the market is not going to solve their problems." |
He added that the German government was going to hold bilateral talks with US officials and also discuss the topic at the G20 summit in Seoul next week. | He added that the German government was going to hold bilateral talks with US officials and also discuss the topic at the G20 summit in Seoul next week. |
On Thursday, Brazil's finance minister Guido Mantega had warned that the Fed's move would hurt Brazil and other exporters. | On Thursday, Brazil's finance minister Guido Mantega had warned that the Fed's move would hurt Brazil and other exporters. |
The latest move by the Fed has been dubbed QE2 as it follows the central bank's decision to pump $1.75tn into the economy during the downturn in its first round of quantitative easing. | The latest move by the Fed has been dubbed QE2 as it follows the central bank's decision to pump $1.75tn into the economy during the downturn in its first round of quantitative easing. |