Asia Pacific countries pressed Europe on Thursday to act more forcefully to quell its debt crisis, setting the tone for a summit overshadowed by growing alarm over the fallout from euro-zone upheaval.
U.S. Treasury Secretary Timothy Geithner and other APEC finance ministers agreed to shore up their own economies against Europe's troubles, warning in a statement of "heightened downside risks to the global economy."
"The crisis in Europe remains the central challenge to global growth," Geithner told reporters after ministerial talks ahead of a weekend gathering in Hawaii of leaders from Asia Pacific Economic Cooperation (APEC) forum members.
His remarks reflected mounting concern among the 21 APEC members about the spillover from Europe that already is starting to brake the pace of growth in one of the world's most economically dynamic regions.Geithner also made clear that the APEC summit would keep the heat on China to let its currency, which Washington says Beijing keeps artificially low for competitive advantage, to appreciate further.
But finance ministers meeting on Thursday fretted about what they see as Europe's failure to take more decisive measures to sort out their debt problems. Italy has overtaken Greece as the epicenter of the crisis.
GLOBAL GROWTH NEEDED
Geithner said the Pacific rim must act quickly on its own.
"Asian economies will need to do more to stimulate domestic demand growth — both so they are less vulnerable to slowdowns, such as the situation in Europe, and so they can continue to contribute to global growth," he said.
A statement issued after the finance ministers' meeting, while making no direct mention of the euro zone, left little doubt that it was an overarching concern at the summit, as it was at last week's G20 summit in France. They pledged to "take coordinated actions strengthen global recovery" and said: "Such risks need to be addressed decisively to restore confidence, financial stability, and sustainable growth."
The ministers also reaffirmed a G20 commitment to move more rapidly toward "more market-determined exchange rate systems and enhance exchange rate flexibility" — a clear reference to China's yuan valuation.
The currency issue has been a major irritant between Washington and Beijing, which has become increasingly assertive in a region where Obama now wants to refocus U.S. attention.
The ministerial talks also dealt with efforts to further open markets between Asia-Pacific members, which have almost 3 billion people and account for 54% of global GDP.
Adding luster to the summit's trade agenda was the announcement in Geneva that Russia, an APEC member, had sealed its 18-year negotiation to join the World Trade Organization.
The TPP pact, a possible template for an APEC-wide trade zone, would help inject the United States into the heart of Asia's regional trade architecture. China has moved ahead with a series of multi-nation trade agreements throughout Asia and has flexed its military muscle in the South China Sea.
Chinese officials have already expressed doubts about U.S. goals at APEC, including a green growth initiative that would cut tariffs on environmental goods and services, such as solar panels and wind turbines.
