Exchange rate issue not key to sustainable growth
YOKOHAMA, Japan, Nov. 10 (Xinhua) -- Exchange rate issue is not key to sustainable growth, but strengthening financial regulations across the world tops policy objectives for achieving sustainable growth in the Asia-Pacific over the next five years, according to a survey of opinion leaders from a report released Wednesday by a regional economic cooperation body.The annual report, named "State of the region 2010-2011," was released by the Pacific Economic Cooperation Council (PECC) during the Asia-Pacific Economic Cooperation (APEC) Leaders' Week meetings.
The survey, which covered more than 400 opinion-leaders from government, business and the non-government sectors, shows that in order to achieve sustained growth in the Asia-Pacific over the next five years, the most important policy objective was the strengthening of financial regulations, followed by increasing domestic demand in East Asia and reducing the U.S. fiscal and current account deficits.
The opinion-leaders also attached importance to increasing final goods among Asian economies while currency "fixes" were not considered as important, with "exchange rate flexibility" and " replacing the U.S. dollar with other currencies" ranked much lower.
The survey also asked respondent about actions that should be taken to rebalance growth in the Asia-Pacific region.
The implementation of structural reforms ranked as the most important action to rebalance growth, followed by investment liberalization, service sector liberalization, and increased spending on social issues.
In the last few months, some U.S. politicians have attributed the imbalance of world economy to the undervaluation of China's currency, Renminbi or yuan. The U.S. congress adopted relevant bills on China's foreign exchange rate, threatening to introduce punitive tariffs on imports from China.
"(In the United States) there will always be domestic political pressures focusing exclusively on exchange rates, but in fact the debate is moving in a healthy direction," said Yuen Pau Woo, president and Co-CEO Asia Pacific Foundation of Canada, in response to a question put by Xinhua.
"We should be focusing on savings and investment balances rather than on specific measures of reform," he said.
"You also have to deal with private savings and fiscal deficit and that will allow economies to work on a broader set of objectives," he added.
PECC, established in 1980, has 26 Member Committees, including one associate member, and two institutional members. The organization seeks to provide information and analytical support to APEC ministerial meetings and working groups.
As the only non-governmental official observer of APEC (Asia- Pacific Economic Cooperation), the council also channels and facilitates private sector participation in the formal process and research input for the regional policy-making.
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