SEOUL - G20 negotiators sought to gloss over bitter divisions on global economic policies after a day of heated arguments as their leaders gathered for a summit in Seoul on Wednesday. Deputies drafting a final statement to be released after the Group of 20 summit concludes on Friday remained far apart on pivotal issues, including currency exchange rates, G20 spokesman Kim Yoon Kyung said. “We had to open the door because the debate was so animated and the room was getting hot,” he said. An Indian official close to the negotiations said discussions on reducing current account imbalances were “picking up” after a rocky start. G20 leaders had hoped this week's gathering, the fifth since the financial crisis exploded in 2008, would mark the beginning of a new era of global cooperation. Hosts South Korea printed banners proclaiming a slogan of “Shared Growth Beyond Crisis.” But the unity forged in crisis has given way to diverging national policies that reflect a multi-speed recovery from the recession, prompting critics to question the effectiveness of the G20 grouping itself. Most major economies are grappling with sub-par growth, leaving them reliant on exports, while emerging powers such as China and Brazil have roared back to pre-recession strength. Stubbornly slow growth in the developed world has fuelled concern that governments around the world will compete for the stagnating exports market by weakening their currencies. The US Federal Reserve's decision last week to spend another $600 billion buying government bonds has drawn reproaches from four continents and intensified the G20 debate over how best to bolster the recovery and avoid another financial crisis. Critics charge that the Fed ignored global repercussions — namely a weaker dollar and a flood of cheap cash that could find its way into emerging markets — and violated the cooperative spirit the G20 has worked hard to preserve. The criticism has made it harder for Washington to press China to allow its yuan currency to rise faster, a central issue in the global rebalancing effort. Underlining that, a Chinese official who has been helping draft the G20 communique said the leaders should not discuss the yuan or any other currency specifically. The Indian official said the final statement would not single out any currency. However, yuan rose to a high of 6.6353 against the dollar in the spot market on Wednesday, the highest level since the currency's revaluation in July 2005, after the People's Bank of China fixed a record yuan mid-point. Beijing typically loosens its tight grip on the yuan as a goodwill gesture ahead of political events that apply pressure on China for more yuan appreciation. The United States got some support from close ally Britain. Finance Minister George Osborne said a strong US economy was in the best interest of Asia and the world, echoing comments from President Barack Obama, who was due to arrive in Seoul later on Wednesday.
