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G20: Cameron fearful of east-west trade imbalances

WORLDleaders must resolve the trade imbalances that are destabilising the global economy or risk a repeat of the Great Depression, David Cameron has warned.

Speaking at the start of the G20 Summit in South Korea, the prime minister said the real test for the summit would be its ability sort out the big battle between the indebted west and the surplus economies of the east.

“The fear we should all have is a return to what happened in the 30s: protectionism, trade barriers, currency wars, countries pursuing beggar my neighbour policies – trying to do well for themselves but not caring about the rest of the world. That is the danger,” Cameron said.

“Now on the big battle, the biggest issue of all is the cause of the last crisis – a wall of money in the east, a wall of debt in the west. We’ve got to deal with that imbalance and I think it’s a real test for this summit and one that Britain will play a very positive part in trying to make sure we really look at these imbalances and deal with them.”

The summit is being dominated by concerns that currency ward will erupt between the world’s largest economies.

America is demanding that China allows its currency to appreciate, while the Chinese insist that any such move will create mass joblessness in China and so dampen worldwide growth.

US president Barack Obama and Chinese premier Hu Jintao were holding talks earlier today in Seoul. Before the meeting started, Obama said that the US and China were “making progress” on economic issues.

This was posted in Bdaily's Members' News section by Ruth Mitchell .