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China has clearly said that it will not accept a communiqué that spells out any target on the current account or for that matter any kind of FX norm.

October 22, 2010 (Hamsayeh.Net) - China rejects any form of rules on currency policy and exports limits among world’s industrialized nations, Reuters reported from South Korea where the G20 meeting is being held this weekend.

Many observers expect the US treasury secretary Timothy Geithner is going to pressure China to accept a new system of currency valuation in which Beijing would agree to allow its currency fluctuate freely and not be pegged to US dollar like the way it’s currently. The move - if accepted by China - should make Chinese industrial products more expensive and therefore reduce trade imbalance in US favor.

Today, the US proposed setting up a new set of rules that would limit to 4 percent of GDP for those countries that have trade surplus versus those that have trade deficits. Also its appears that United States, as expected, is proposing a new free fluctuating rule for all G20 members, including China.

A source familiar with the G20 discussions said, ‘China has clearly said that it will not accept a communiqué that spells out any target on the current account or for that matter any kind of FX norm.’ Adding, ‘So the communiqué will avoid any such reference, but much of Geithner's proposals could find their way through as one of the options on the table.’

Mired in deep economic crisis, the United States is struggling to revitalize its stagnated productive forces thus creating real jobs for millions of unemployed workers. The North American country’s industrial sector today represents only a shadow of what it used to be not long after the end of WWII.

 United States view China's currency manipulation as the main cause of its own deindustrialization.

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