Kiyoshi Takenaka & Gleb Bryanski YOKOHAMA: Cracks between advanced and emerging economies that were papered over by the G20 resurfaced at an Asia-Pacific summit on Saturday, with Washington and Beijing returning to their positions on trade and currencies. US President Barack Obama warned countries such as China against relying too much on exports for growth, and Chinese President Hu Jintao reiterated Beijing's commitment to a gradual reform of its exchange rate regime. “One of the important lessons the economic crisis taught us is the limits of depending primarily on American consumers and Asian exports to drive economic growth,” Obama told a forum of Asia-Pacific business leaders. “Going forward, no nation should assume that their path to prosperity is simply paved with exports to America,” he said on the final leg of a 10-day tour that has also taken him to India, Indonesia and South Korea. The United States and China blame each other for doing more damage to international trade. Washington contends the yuan is undervalued, giving it an export advantage, while Beijing argues the US Federal Reserve's easy-money policy is aimed at weakening the dollar to boost exports. Hu, taking the podium shortly after Obama, told the business executives China wanted to expand domestic demand growth, and remained committed to reforming its exchange rate “on the basis of retaining initiative, controllability and gradualness”. “China will continue making encouraging a balanced international balance of payments an important task in ensuring macroeconomic stability,” Hu said. Obama's National Security Adviser, Tom Donilon, later told a news briefing China needed to show progress on reforming the exchange rate by the time Hu visits Washington in January. “President Hu Jintao's visit in January would be an important time to look at exactly what the quantum of progress has been on this,” Donilon said. “The United States ... would like to see China proceed apace on these reforms, because it's important, we think, to China, but it's important to the world in terms of a stable economic path forward.” Obama and Hu joined other leaders of the Asia-Pacific Economic Cooperation (APEC) group for a weekend summit that is focusing on policies to ensure balanced growth and taking concrete steps toward setting up a vast free-trade area in the world's fastest-growing economic region. The APEC leaders agreed after a first round of talks the world economy was improving but still fragile, a Japanese government official said. Sovereign debt problems remain a risk, while unemployment and the financial sector continue to be of concern, the official said. Ireland was a reminder of those risks and the financial contagion they potentially pose. Irish borrowing costs shot to record highs this week because of concern about the country's ability to reduce a public debt burden swollen by bank bailouts, and worries that private bond holders could be forced to shoulder part of the costs of any bailout by taking “haircuts” on their holdings. But International Monetary Fund chief Dominique Strauss-Kahn told reporters at the APEC summit that “Ireland can manage well” and did not need a bailout at this time. The G20 countries are trying to find ways of bringing down overly large current account surpluses and deficits among major economies. The group's leaders agreed in Seoul to set “indicative guidelines” for imbalances, but offerred investors little proof that the world was any safer from economic catastrophes. APEC is for the first time championing a collective growth strategy, emphasising balanced and sustainable growth, an elusive goal when the global economy is split between cash-rich exporters and debt-burdened importers. The leaders will pledge to take steps to create a vast Free Trade Area of the Asia-Pacific (FTAAP) in the region, home to 40 percent of the world's population and 53 percent of global economic output, by building on existing pacts.
