Finance ministers from the Asia-Pacific Economic Cooperation forum vowed on Thursday to maintain fiscal stimulus measures to bolster the global economic recovery until the recovery is firmly established.
"We agreed on the crucial role that supportive fiscal measures in the APEC region had played in avoiding an even deeper global recession and resolved to remain vigilant until the economic recovery gains traction," the ministers of the 21-member grouping said in a joint statement issued after a meeting in Singapore.
The APEC finance ministers agreed that the pace of implementing "exit strategies" from expansionary fiscal policy and accommodative monetary policy to spur the recovery should take into account different stages in the economic recovery of member economies, the statement said.
Singapore Finance Minister Tharman Shanmugaratnam, who chaired the meeting, said the ministers discussed currency issues as part of an overall menu of options to promote medium-term to long-term structural reforms to sustain economic growth.
"We will undertake monetary policies consistent with price stability in the context of market oriented exchange rates that reflect underlying economic fundamentals," the statement said.
But Tharman indicated the United States or other member economies did not urge China to ensure flexibility in its exchange rate policy, which effectively pegs the yuan to the U.S. dollar.
"None of us, I can say from certainly from today's discussions, none of us around the table were calling for...have any sudden significant realignment of exchange rates," Tharman said at a post-meeting news conference.
U.S. manufacturers complain that China artificially holds the value of the yuan lower to make its exports cheaper, which economists say has led to imbalances in the world economy by contributing to large U.S. trade deficits and Chinese trade surpluses.
Similarly, Thai Finance Minister Korn Chatikavanij said, "No country has made any call (to any country) for any specific change. We all agreed that we need to restructure the overall economy."
"For the long term, we have to find a balance (in) exchange rate policy," Korn told reporters. "The Chinese economy has been strong for years because of its stable exchange rate policy and we all respect that. But each and every one of us has to adjust our exchange rate policy."
At the meeting, the Pacific Rim finance ministers agreed on the need to reduce and stabilize public sector debt burdens "at a low and prudent level," the statement said, indirectly urging economies such as Japan and the United States to maintain fiscal discipline.
"In many economies, this will require, beyond the mere phasing out of stimulus measures, a comprehensive strategy of sustained budget consolidation, growth-enhancing reforms, and measures to address long- term demographic challenges," it said.
Parliamentary Secretary for Finance Shinichiro Furumoto represented Japan at the meeting on behalf of Finance Minister Hirohisa Fujii.
Accounting for more than half the world's gross domestic product, APEC groups Australia, Brunei, Canada, Chile, China, Hong Kong, Indonesia, Japan, South Korea, Malaysia, Mexico, New Zealand, Papua New Guinea, Peru, the Philippines, Russia, Singapore, Taiwan, Thailand, the United States and Vietnam.
