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China and US tone down trade spat China and US tone down trade spat
(40 minutes later)
US Treasury Secretary Tim Geithner and a Chinese counterpart have attempted to calm trade tensions at an Asia-Pacific finance ministers' meeting in Japan.US Treasury Secretary Tim Geithner and a Chinese counterpart have attempted to calm trade tensions at an Asia-Pacific finance ministers' meeting in Japan.
Mr Geithner dropped an earlier call for G20 countries to adopt a target to reduce their economic imbalances to less than 4% of their output.Mr Geithner dropped an earlier call for G20 countries to adopt a target to reduce their economic imbalances to less than 4% of their output.
The policy was seen as targeting China's substantial trade surplus.The policy was seen as targeting China's substantial trade surplus.
Meanwhile, China's vice finance minister, Wang Jun, supported the US Federal Reserve's quantitative easing.Meanwhile, China's vice finance minister, Wang Jun, supported the US Federal Reserve's quantitative easing.
He said the move would help to boost economic growth in the US, which is important to the global recovery.He said the move would help to boost economic growth in the US, which is important to the global recovery.
Defending the Fed
This was in contrast to the criticism that has been thrown at the US central bank by many other developing countries, as well as some of Mr Wang's colleagues.This was in contrast to the criticism that has been thrown at the US central bank by many other developing countries, as well as some of Mr Wang's colleagues.
'Indicative guidelines'
China's Vice Foreign Minister Cui Tiankai had previously said that the Federal Reserve had the right to take steps without consulting other countries beforehand, but had added: "They owe us some explanation."China's Vice Foreign Minister Cui Tiankai had previously said that the Federal Reserve had the right to take steps without consulting other countries beforehand, but had added: "They owe us some explanation."
On Monday, a Chinese state newspaper - the People's Daily - published a front page opinion piece in its international edition claiming that quantitative easing amounted to currency manipulation - a charge often levelled by US politicians at China - and would lead to a currency war and global economic collapse.On Monday, a Chinese state newspaper - the People's Daily - published a front page opinion piece in its international edition claiming that quantitative easing amounted to currency manipulation - a charge often levelled by US politicians at China - and would lead to a currency war and global economic collapse.
For his part, Mr Geithner said the US wanted "indicative guidelines" for current account imbalances, but added that "it's not something that can reduce easily to a single number". Responding to the criticism, US President Barack Obama came out in support of the Federal Reserve's move.
"The Fed's mandate, my mandate is to grow our economy," he said, speaking on Monday during a state visit to India. "That is not just good for the United States, that is good for the world as a whole."
Free trade area
Mr Geithner said the US only wanted "indicative guidelines" for current account imbalances, but added that "it's not something that can reduce easily to a single number".
At a G20 meeting of finance ministers in Korea last month, Mr Geithner advocated that G20 countries should aim for 4% of economic output as a "benchmark for the future" for such trade imbalances.At a G20 meeting of finance ministers in Korea last month, Mr Geithner advocated that G20 countries should aim for 4% of economic output as a "benchmark for the future" for such trade imbalances.
China's current account deficit is currently 5% of its gross domestic product.China's current account deficit is currently 5% of its gross domestic product.
Free trade area Mr Geithner and Mr Wang were speaking at a meeting of finance ministers from the countries of the Asia-Pacific Economic Co-operation (Apec) forum at Kyoto in Japan.
The two ministers were speaking at a meeting of finance ministers from the countries of the Asia-Pacific Economic Co-operation (Apec) forum at Kyoto in Japan.
The 21 Apec finance ministers agreed in a communique that countries would "move towards more market-determined exchange rate systems that reflect underlying economic fundamentals and will refrain from competitive devaluation of currencies".The 21 Apec finance ministers agreed in a communique that countries would "move towards more market-determined exchange rate systems that reflect underlying economic fundamentals and will refrain from competitive devaluation of currencies".
The ministers also advocated the long-term aim of creating a free trade area to replace the more than 100 bilateral and mini-free-trade-area agreements already signed amongst them. The ministers also advocated the long-term aim of creating a free trade area to replace the more than 100 bilateral and mini free-trade-area agreements already signed amongst them.
"Rather than doing bilaterally or with a small number of countries, free trade deals work better when more countries get involved," said Haruhiko Kuroda, president of the Asian Development Bank."Rather than doing bilaterally or with a small number of countries, free trade deals work better when more countries get involved," said Haruhiko Kuroda, president of the Asian Development Bank.
Apec countries account for 53% of global economic output, and 44% of global trade. Apec countries account for 53% of global economic output, and 44% of global trade. Apec heads of government will hold a summit this weekend.
Apec heads of government will hold a summit this weekend.