BEIJING (Reuters) - China responded on Wednesday to a United States proposal for closer cooperation among Group of 20 countries to tackle global imbalances by saying it supported international economic policy coordination.
In a statement to Reuters, the Chinese Foreign Ministry also said international financial institutions had a role to play in providing policy recommendations, though only for reference purposes.
"All countries should determine appropriate macro-economic policies according to their own national conditions," it said.
U.S. President Barack Obama will urge world leaders at a summit in Pittsburgh this week to launch a framework of "mutual assessment" whereby the International Monetary Fund (IMF) would make policy recommendations on rebalancing to the G20 every six months, according to a U.S. document obtained by Reuters.
The Chinese Foreign Ministry did not refer to any of the specific details of Obama's proposal, but made clear its belief that the IMF had more important work at hand.
"At present, the principal task of the IMF is to speed up the reform of its governance structure and to really increase the speaking rights and representation of emerging markets and developing countries," it said.
China, Brazil, Russia and India this month called for a 7 percent shift in IMF voting rights in favor of developing countries, more than the 5 percent the United States is proposing.
China will get the biggest increase in voting power when the global lender completes a long-awaited restructuring in 2011, the head of the IMF said on Tuesday.
The foreign ministry's statement indicated that Beijing could find common ground with at least the thrust of Obama's ideas about rebalancing.
"We approve of countries strengthening their macro-economic policy coordination and together pushing forward the sustainable and balanced development of the world economy," it said. "Relevant international financial organizations can provide recommendations as reference."
Chinese government researchers on Tuesday gave a cautious welcome to the U.S. initiative, but recent history shows that China will not let the IMF have real bite at a supervisory role.
When the IMF changed its exchange-rate monitoring rules in 2007, Beijing feared it was a ploy by the United States to enlist the organization's support in its campaign for a stronger yuan.
China blocked the IMF's annual assessment of the Chinese economy until the fund reversed the rule change this year.
(Reporting by Simon Rabinovitch and Zhou Xin; Editing by Alan Wheatley and Chris Lewis)