A day ahead of the fifth summit of G20 countries in Seoul, India has made it clear that it does not see the valuation of the Chinese currency as the biggest factor delaying economic recovery in the developed world, a view that is different from the stated position of the United States.
"Research has been put forth suggesting the under-valued Chinese currency is the most important thing behind the growth imbalances in the global economy but my view is that exchange rate policies are not the only or the biggest issue," India's Sherpa deputy chairman of the Planning Commission Montek Singh Ahluwalia said on Wednesday.
It is not clear if Prime Minister Manmohan Singh will adopt the same position at the meeting of the leaders when the summit commences on Thursday. Singh arrived in Seoul on Wednesday evening for the summit, the first in Asia. The G20, which refers to a group of 19 countries and the European Union, accounts for about 85 per cent of global economic output.
Sherpas, as representatives of different countries who prepare the ground for talks among their leaders are called, have had two rounds of discussions and negotiations since Tuesday.
In the run-up to the Seoul summit, the US has been drumming up support for pressing China to desist from its policy of keeping its currency undervalued to enhance competitiveness of its exports. Ahluwalia said he had conveyed his views on the subject in his meetings with US Treasury Secretary Timothy Giethner.
The Chinese yuan is valued at one-sixth the US dollar, a rate that the US believes partly has kept its trade deficit high. Latest trade data from the US, released on Wednesday, showed deficit at $44 billion for September - $27.8 billion is accounted for by China.
Ahluwalia's position seems to differ from that of the governor of the Reserve Bank of India D. Subbarao.
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