G-20 Ministers Meet to Address Global Imbalances

This is a transcript of top stories presented by China's CCTV Business Channel as produced by CNBC Asia Pacific.

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I'm Saijal Patel from CNBC and you're watching “Asia Market Daily”.

As leaders from the G20 meet in Seoul to thrash out the issue of global trade imbalances, U.S. Treasury Secretary Tim Geithner has responded to criticism that America is weakening its dollar for economic advantage.

In an exclusive interview, CNBC's Steve Liesman asked Geithner directly if America is indeed running a policy to weaken its dollar.

(SOT) Timothy Geithner, U.S. Treasury Secretary:

“The United States of America will never do that. We will never seek to weaken our currency as a tool to gain competitive advantage or to grow the economy. It's not an effective strategy for any country, certainly not for the United States. We'll never do that. Again mostly what you see, if you look at broader arc of financial markets over last 2.5 years is, you've seen a period where when the world was most concerned about the potential risk of global depression, most concerned about the possibility of systemic collapse. You saw the world seek the safety of the risk free assets of United States. The dollar generally rose during that period of time and as the world becomes more confident, progressively more confident, some of that safe haven inflows have been reversed. That's been dominant trend we've see, and that's I think very encouraging, not just about people's overall confidence in US, but a sign of greater confidence that although we face a lot of challenges in the United States and globally, the risks we face are more manageable than those we've faced at any time over the last 2.5 years.”

Meantime, Geithner says he's hopeful G20 leaders will come to an agreement on the issue of resolving global imbalances, during the two-day talks.

The U.S. Treasury Secretary is proposing nations develop a set of indicators - which can be used as an "early warning system of the risk of imbalances."

He says the world needs balance, to promote "strong growth and financial stability".

(SOT) Timothy Geithner, U.S. Treasury Secretary:

"I'm very confident you will see world come together and embrace this basic framework for cooperation that we laid out first two weeks ago with the finance ministers and central bank governors. And it's worth stepping back and looking at whether the basic objectives of this proposal and they are to make sure that as the world recovers, we don't set in motion the types of forces that could lead to re-emergence of excessive imbalances around the world, deficits or surpluses, cause those would threaten future growth. It would make growth more fragile and weaker in the future and make financial stability more at risk. That's why it matters that we have more balance as countries as we grow. And we've provided a proposal that allows for a cooperative framework for managing through those kinds of things. And I think you're going to see very broad support for that, because again it's better than the alternative. The alternative is countries that want to go their own way and you see the cooperative forces that were so important in solving the crisis dissipate."

Meantime, World Bank President Robert Zoellick has cleared up suggestions he made earlier this week, for the world's biggest economies to use gold as an indicator, to help set foreign exchange rates.

Zoellick says he's "not advocating a return to the 19th century, when money supply was linked to gold."

(SOT) Robert Zoellick, World Bank President:

“The point on the monetary system is, whether people recognize it or not, you're moving towards a Brenton Woods 3, you're moving away from the system that was created a long time ago, in 1971 the end of the fixed exchange rates. As part of that system the dollar will not be the sole reserve currency, you've got the dollar, you've got the Euro, you've got the Yen, you've got the Pound, and over time, a critical point, I believe the renmimbi will play that role if it internationalizes the currency & move towards an open capital account. Now the point on gold, and in a sense this is the golden elephant in the room, whether people recognize it or not, it's being used as an alternative monetary asset.”

Although Zoellick doesn't believe the trade imbalances can be solved through a fixed exchange rate system - he says the International Monetary Fund should look into the issue.

(SOT) Robert Zoellick, World Bank President:

“But I do think there can be a role for the IMF in trying to monitor this, look at not only current account which are the trade policies but also what's called the capital account policies and try to prod the different players to move forward in a way that doesn't create a lack of confidence, create greater risk which could lead to anxieties of protectionism.”

Zoellick says G20 leaders are likely to accept America's suggestion for nations to set targets for current accounts, as a way of resolving trade imbalances. But he says it's only one part of the solution - and talks will certainly be a lot easier if countries are "opening markets as opposed to threatening to close them".

(SOT) Robert Zoellick, World Bank President:

“I think that the U.S. idea about looking at the current accounts as an indicator of these balances is a reasonable idea. I think it's likely to be accepted, but I think it's one brick in building a larger structure. If there's any sort of one or two single messages I’d add to it is these currency adjustments & rebalancing will be a lot easier if everybody's growing. So that goes back to the growth fundamentals.”

The G20 has put South Korea on the world stage, and it's doing all it can to seize the moment.

It's the biggest summit that's ever been held in Seoul - attracting thousands of people to the capital.

But Korea's Tourism Board President says the effect of the G20 won't last very long - so it's important to promote what the country has to offer; in an effort to create some much needed jobs.

(SOT) Mr. Charm Lee, President, Korea Tourism Board:

“Seoul is the next happening place in the world. Me as representing tourism I'd like to exploit this exposure as much as possible, and direct the attention of the world to the charm of Korea. Tourism is of course the one industry, together with the service industry as a whole that is capable of creating jobs. And that's you know the big problem all over the world, especially also in Korea. We have growth without job growth. We have growth, with losing jobs actually. But the tourism industry is the one industry where we can gain new jobs.”

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