Economic Recovery

Focus on basics to foster growth

By Wang Bo and Ding Qingfen (China Daily)
Updated: 2010-11-11 07:36

SEOUL - Top business chiefs on Wednesday called for leaders of the world's major economies to focus on fighting against trade protectionism and spurring economic growth at the G20 Seoul Summit, instead of becoming obsessed with the currency debate.

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"The entire world's focus at this point must be on sustaining economic growth and how to make growth more equitable," said Victor Fung, honorary chairman of the International Chamber of Commerce (ICC), a Paris-based world business and trade organization that represents companies from more than 120 countries and regions.

"It is important at this stage to go back to the fundamentals of how to create jobs and sustain growth," he said. "Using currency is one way to resolve ongoing global imbalances, but might not be the best way," Fung told reporters at a media briefing for a business forum held in Seoul on the eve of the two-day summit.

Leaders of the G20 economies will gather in Seoul on Thursday and Friday with an ambitious agenda: safeguarding the fragile economic recovery.

However, countries led by the United States are urging China to accelerate the pace of revaluing the yuan, allowing it to appreciate, as a solution to rebalancing the global economy, while the emerging market nations, seeing more money inflows after the US Federal Reserve pledged to pump $600 billion into the economy, are blaming the US for destabilizing the foreign exchange market and intensifying an asset bubble risk.

"We have an obligation not only to provide economic growth, but also to make that growth inclusive and equitable," ICC Chairman and Senior Partner Emeritus of McKinsey & Company Rajat Gupta said.

Business leaders also stressed the importance of restoring global trade, as a buoyant expansion of international trade is a key element in the fight to improve the health of the world economy.

"Trade is the lifeblood of the global economy and trade must be allowed to flourish if we are to have sustainable economic growth," said Fung, who is also chairman of Li & Fung Group, a Hong Kong-based multinational group of companies.

Global foreign trade contracted 12 percent in 2009, the sharpest decline in 70 years, and it is currently forecast to undergo a rebound of 13.5 percent in 2010, according to the World Trade Organization.

"It's important that we bring the barriers down and commit to an open global economy and trade. Everyone will suffer if we allow obstacles to stand among countries, while all will benefit from pulling the barriers down," said Perrin Beatty, president of the Canadian Chamber of Commerce.

"In order to restore business confidence, we have to make them feel that next year will be better than this year," Beatty said.

China Daily

(China Daily 11/11/2010 page3)