CHINA forced a series of tough concessions from the G20 over the weekend as finance leaders thrashed out which indicators should be used to measure risks to the global economy.
The talks were overshadowed by the feud between China and the US over the Eastern power’s perceived manipulation of its exchange rate to devalue the yuan and keep its exports cheap.
Western finance ministers led by the US had hoped to include exchange rates and currency reserves among a list of indicators that would be used to monitor the economies of member countries.
But with the talks ready to collapse and China refusing to countenance their inclusion, they were forced to cave to China’s demands. China also succeeded in removing a reference to current account imbalances in favour of the more narrow trade balance, in which Beijing expects its surplus to shrink as it boosts domestic demand.
Chancellor George Osborne attempted to put a positive spin on the gruelling set of negotiations, saying the meeting was an important step forward. China had previously hoped to avoid having to adhere to such a strictly defined list of indicators and the inclusion of net investment income flows was also seen as a victory.
The problem now will be in agreeing on how to implement the list, with talks in April expected to be fraught with difficulties.