BEIJING/BERLIN: China rebuffed Friday a US plan to set target limits for trade imbalances and Germany dubbed the Fed's money-printing policy “clueless”, setting the stage for what could be a fractious G20 summit next week. Washington believes an undervalued yuan is a major cause of economic imbalances and has pressed Beijing, largely in vain, to let the currency rise more swiftly to reflect the strength of what is now the world's second-largest economy. The waters of the debate have been muddied by the Federal Reserve's decision to buy $600 billion in long-term bonds with new money in an effort to revive the flagging US economy. Resentment is rumbling worldwide that the initiative will generate even more instability by ramping up currencies against the dollar, inflating asset bubbles and increasing inflation. “With all due respect, US policy is clueless,” German Finance Minister Wolfgang Schaeuble told a conference. “(The problem) is not a shortage of liquidity. It's not that the Americans haven't pumped enough liquidity into the market and now to say let's pump more into the market is not going to solve their problems.” Policymakers from the world's new economic powerhouses in Latin America and Asia have said they would consider fresh steps to curb capital inflows after the Fed's move. Zhou Xiaochuan, China's central bank governor, said while Beijing could understand that the Fed was implementing more monetary easing in order to stimulate the US recovery, it may not be a good policy for the global economy. Efforts to reduce imbalances that are destabilizing the global economy will top the agenda of the Nov. 11-12 summit of the Group of 20 forum of leading economies in Seoul. But China and Germany have now both opposed a plan floated by US Treasury Secretary Timothy Geithner last month to cap current account surpluses and deficits at 4 percent of gross domestic product. “Of course, we hope to see more balanced current accounts,” Chinese Vice-Foreign Minister Cui Tiankai told a news briefing. “But we believe it would not be a good approach to single out this issue and focus all attention on it. The artificial setting of a numerical target cannot but remind us of the days of planned economies.” German Economics Minister Rainer Bruederle dismissed the proposal at the time as smacking of old-style central planning. Cui, China's chief G20 negotiator, also rejected any attempt to set target ranges for the yuan to appreciate. “That would indeed be asking us to manipulate the ... exchange rate, and it is something that we will of course not do,” Cui said. Japan's central bank Friday gave details of its own asset-purchase program, announced last month. Worth 5 trillion yen ($62 billion), it is just a tenth the size of the Fed's scheme. Cui said he was worried at the prospect of a flood of money pouring into global markets in search of higher yields. As the issuer of the world's main reserve currency, the United States needed to adopt a responsible position. “They owe us some explanation,” he said. “I've seen much concern about the impact of this policy on financial stability in other countries.” An official newspaper said China needed to respond by raising interest rates again following a surprise increase on Oct. 19. Inflationary pressures prompted both India and Australia to raise interest rates this week.