As China leads the way out of recession, Asians at summit claim more clout in global bodiesBy Raf Casert, AP
Monday, October 4, 2010
China calls for more Asian clout in global economy
BRUSSELS — The surging economies of Asia should be granted more power in the traditionally Western-dominated global financial institutions, Chinese Premier Wen Jiabao said Monday at the opening of the Euro-Asian summit.
The start of the two-day 48-nation meeting, set amid the high security and gilded opulence at the Belgian royal palace, underscored the Asian nations’ demands for a rebalancing of international financial structures as they lead the world out of recession.
Wen stressed that Asian leaders expect Europe to give up some of its seats at the International Monetary Fund, the international lender charged with helping countries that get into currency and financial crises.
“We need to improve the decision-making process and mechanisms of the international financial institutions, increase the representation and voice of developing countries, encourage wider participation,” Wen told the other leaders seated around an oval table. “We must explore ways to establish a more effective global economic governance system,” he said.
Held in an old-world palace flush with crystal chandeliers and pillars, Wen and some other Asian leaders made it clear that Asia would start making its robust economic growth count on the global stage.
Cambodian President Hun Sen stressed the Asian economies should be recognized for leading the global economic recovery.
While demand in the EU and U.S. economies was once the driver of growth, it is in decline compared to demand growth in Asia.
Even Germany, the economic giant of the European Union, paid tribute. “We have to thank the Asian upswing for the positive economic development,” German Chancellor Angela Merkel said.
Because of the swing in economic momentum, the battle for seats at the IMF has become a symbolic battle ground.
Last week, the 27-nation EU said it would be prepared to give up some of its power base at the IMF to emerging countries, a concession that could cost it two seats on the governing board and the right to have a European heading the Washington D.C. organization, which hands out billions of dollars around the world.
At the moment, EU countries occupy nine of the 24 seats.
“The fact that Europeans show us the flexibility and willingness to negotiate is important,” said Rhee Chang-yong, a South Korean delegate. “For us, the IMF quota reform is very symbolic and very important,” he said, reflecting Asian feelings their economic emergence should count for more on the global stage.
South Korea will organize the Group of 20 meeting of the world’s major economies next month and expects to have an agreement then.
The leaders of 48 nations face potential clashes on market restrictions and trade surpluses. On Wednesday, there will also be bilateral EU summits with China and South Korea.
Overall, the nations from the two continents represent about half the world’s economic output and 60 percent of global trade. but, instead of Europe driving the summits, the emergence of China as a new trading juggernaut has somewhat turned the tables at the biennial meetings.
Last week, the IMF said that Asian and Latin American economies were doing well but prospects for some European countries, including Greece, remain uncertain.
On Wednesday, the EU leaders and South Korean President Lee Myung-bak will sign a free trade pact that will slash billions of dollars in industrial and agricultural duties, despite some countries’ worries that Europe’s auto industry could be hurt by a flood of cheaper cars.
The deal — the first such pact between the EU and an Asian trading partner — will come into force on July 1, 2011.
Japan’s Prime Minister Naoto Kan will pursue a free trade agreement in his bilateral meetings with European leaders, said Foreign Ministry spokesman Satoru Satoh.
He said Japanese business was “alarmed” by the EU’s deal with Seoul.
Japan feels it will be at a competitive disadvantage with South Korea, which has an agreement with the EU that threatens to take a bite out of Japanese exports, particularly of cars and televisions, he said.
While Japan is anxious for an agreement as soon as possible, he said the Europeans still lack consensus among its 27 members. With an economy four or five times larger than Korea’s, the Europeans are being more cautious with Japan.
Besides the economy, Japan also has an issue with China, as both continue a diplomatic row following the arrest of a Chinese fishing boat captain whose trawler collided with Japanese patrol vessels near disputed islands.
Despite the formal opening, economic discord might also surface at the summit.
Many Western nations have complained that China keeps its currency undervalued to give its exporters an unfair price advantage on international markets while at the same time China closes off its markets, keeping European businesses out.
Associated Press Writer Arthur Max contributed to this story
Tags: Asia, Belgium, Brussels, China, East Asia, Europe, Germany, Greater China, International Agreements, International Trade, Japan, Lee Myung-bak, Recessions And Depressions, South Korea, Summits, Western Europe