- Title: BELGIUM: Malaysian PM says EU and US should not bully China over currency
- Date: 5th October 2010
- Summary: BRUSSELS, BELGIUM (OCTOBER 4, 2010) (REUTERS) (SOUNDBITE) (English) MALAYSIAN PRIME MINISTER NAJIB RAZAK ON EU GIVING MORE IMF SEATS TO ASIAN NATIONS, SAYING: "Such discussions should be handled in a very tactful manner, because I don't think the Chinese appreciate any form of pressure against them, but it has to be on the basis of engagement to work out a kind of a stable currency regime, because any drastic changes would not be good for the financial system. So anything that is controlled, managed I think would be positive for the world's financial system."
- Embargoed: 20th October 2010 13:00
- Location: Belgium
- Country: Belgium
- Topics: International Relations,Economic News
- Reuters ID: LVACJX1GTC9MXDGY4ATZ22XFLARJ
- Story Text: Asian leaders held a flurry of bilaterals ahead of the official start of the Asia European ASEM meeting in Brussels on Monday (October 4).
One draft showed that they planned to agree on Tuesday to boost domestic demand and investment through gradual liberalisation of domestic and international markets.
The statement also says that all forms of trade protectionism should be rejected and that it was crucial to implement International Labour Organisation fundamental principles and rights at work.
Australia, New Zealand and Russia all joined Asem for the first time.
British Deputy Prime Minister Nick Clegg said he believed Australia was a perfect partner in bridging differences between Asia and Europe thanks to their cultural and historical closeness to the United Kingdom.
However he refused to give new Prime Minister Julila Gillard any advice on how to form a coalition government. Gillard hung on to power after securing the backing of three independents and following inconclusive elections last August.
Although she has managed to scrape together enough support to form the next government the independents backing her have not promised blanket support.
"Well I think its hugely significant because without Australia the gathering would be seriously incomplete. We were discussing this with your Prime Minister: what happens in Asia is of immediate relevance to every family and community in Australia so it would be very odd not to have Australia and it is absolutely wonderful that's the way things have turned out. (what about relationship with Europe?) Well its a very strong relationship and again, Australia and, dare I say, Britain and Australia together, can play a particularly important role because of our bonds with history, with language, with culture to bring the two big blocs, if you like, at the summit, Asia and Europe together. That's exactly what the prime minister and myself have just been discussing (q: have you had opportunity to discuss minority government with our prime minister?).." said Nick Clegg.
Clegg later met with South Korea's Lee Myung Bak who is hosting the G20 next month.
South Korean officials say Seoul wants the G20 to become an essential tool in leading the world out of the economic crisis.
Leaders at the G20 plan to discuss fiscal consolidation, monetary policy and exchange rate policy and how to maintain the momentum of recovery.
Exchange rates will be naturally discussed under the framework and Korea as the chair will do its best to harmonise different opinions.
The United States accuses China of keeping its currency, the yuan, artificially low, hurting U.S. jobs and competitiveness.
In his opening speech, Chinese Premier Wen Jiabao said exchange rates of major reserve currencies should remain relatively stable.
Malaysia's Prime Minister Datuk Seri Najib Tun Razak warned against bullying China on currency.
"Such discussions should be handled in a very tactful manner, because I don't think the Chinese appreciate any form of pressure against them, but it has to be on the basis of engagement to work out a kind of a stable currency regime, because any drastic changes would not be good for the financial system. So anything that is controlled, managed I think would be positive for the world's financial system" he said.
Malaysia will call for fairer world trade at this ASEM summit, as well as better financial supervisory and governance, as the way forward for the global economy.
Prime Minister Razak says fair trade should be free of protectionism while a more effective governance will create balanced development and spur global recovery.
And in the interest of fairness, Razak welcomed the EU's willingness to cede two seats on the board of the International Monetary Fund (IMF) was a positive move that recognised the increasingly important role of emerging markets.
The concession, made ahead of next week's annual meeting of the IMF, responded to long-standing pressure from the United States and emerging economies to reduce what they view as European over-representation at the global lender of last resort.
"There could be. There could well be. I think it is time, I alluded to it when I said the global economic environment has changed, I think the voices of the emerging markets must be factored in," he said.
European officials have long said that China, which could soon become the world's second biggest economy replacing Japan, should boost domestic demand to better balance its now mainly export-led growth.
To achieve that, some European officials have said that China would need to strengthen its social safety nets like health care and pensions, to increase consumer confidence to spend.
The joint declaration said social safety nets could be an economic stabilizer at a time of crisis, not just as a welfare or redistributive mechanism.
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