As Seoul prepares to host G20, Summers speaks of trade 'imbalances'
| Seoul, South Korea
A sense of excitement is sweeping this spruced-up capital just two days before the arrival of the leaders of 20 of the world鈥檚 economic powers for a Group of 20 (G20) summit that few observers believe will solve deep-seated problems confronting the entire global trading system.
Platoons of police in sparkling new uniforms roamed subways and streets. Posters and giant TVs displayed notices telling people to welcome visitors. Radio commercials urged everyone to clean the streets before the arrival Wednesday of 19 heads of state, including President Obama.
In the midst of an outburst of national pride, however, finance ministers and lower-ranked officials referred to as 鈥渟herpas鈥� haggled over the wording of an 鈥渁ction statement鈥� that both Mr. Obama and China鈥檚 President Hu Jintao can agree on.
Obama鈥檚 top financial adviser, Larry Summers, in a live teleconference from the White House to a meeting of the Asia Society鈥檚 Korea Center avoided predicting the real consensus for which participants have been pressing.
Asked if he believed the G20 would then end without any real agreement, he responded carefully, 鈥淚 am confident we will reach a successful outcome at the summit鈥� 鈥� a circumlocution that suggested a face-saving document that would put off real solutions for the next G20 next year in France.
A prolonged struggle?
Rather than come to terms now, Mr. Summers predicted a prolonged struggle to bring about 鈥済lobal rebalancing,鈥� the polite term for bringing about more equitable balances in trade. US officials are convinced that China鈥檚 currency is set, as a result of government intervention, at a level far below its real value so the Chinese can compete more favorably in foreign markets.
鈥淭he imbalances will not be fixed,鈥� he said, but he believed that the vast surpluses that China has enjoyed with the US might decrease as China focuses on 鈥渄omestic demand.鈥� In the meantime, he said, 鈥淵ou are going to see continuing discussion鈥� on the issue.
William Rhodes, a former Citigroup vice chairman who hosted the session with Summers, saw the tension among the Group of 20 as reflecting the rise of an economic bloc of Asian economic powers that he forecast 鈥渨ill be very dominant in the world of the future.鈥� At this stage, he said, 鈥淲e are on the edge of a crisis鈥� 鈥� though he was 鈥渙ptimistic China will open itself over time.鈥�
Seoul puts on the glitz
Such concerns were far from the thoughts of Seoul鈥檚 Mayor Oh Se-hoon as he boasted of the wonders of this metropolis of 10 million people before audiences of hundreds of journalists as well as aides of visiting leaders.
In dinners and dance performances, the mayor advertized this capital of soaring skyscrapers rising above crowded streets and markets as 鈥渁 city that foreigners want to experience not only as tourists but also as investors and residents.鈥�
New street signs in English, taxis whose drivers speak at least one foreign language, and a new 鈥済lobal business center鈥� to bring in foreign investment were some of the lures cited by the mayor at a lavish dinner on a floating restaurant in the Han River.
Mr. Oh, a conservative widely believed to have aspirations of running for president in the next election in Dec. 2012, shrugged off concerns about whether the summit would rise above the level of a grand happening with little real substance in terms of long-range results.
鈥淧lease don鈥檛 ask me such questions,鈥� he said, saying farewell to a stream of foreign guests. 鈥淚 don鈥檛 know anything about that. I only know about Seoul."
