Fresh Currency Solution

After little progress was made on currency issues at the International Monetary Fund's annual meeting over the weekend, the turmoil threatens to overwhelm the agenda of the Group of 20 leaders' summit in Seoul on Nov. 12. South Korean officials worry that unless there is progress at the summit, other countries will decide the G-20 isn't the right forum for dealing with critical global economic issues.

'Every country taking part must not pursue only their national interest,' South Korean President Lee Myung-bak, who will be chairman of the summit, said Monday. 'If this happens, I fear the recovery and sustainable growth of the global economy will be put into question.'

In coming days, South Korea will encourage the U.S. and European nations to ease their pressure on China to revalue its currency, people familiar with the effort said, and look for other ways to change the sizable trade surpluses China has generated, which are blamed for a broader imbalance in the global economy.

South Korean officials declined to discuss specifics. Their broad stance first emerged last month, when the country's ambassador to the U.S., Han Duck-soo, raised the use of export targets as part of employing 'some creativity' in the currency fight. People familiar with the South Korean effort note that Japan accepted export limits for a period in the 1980s when it was similarly criticized for trade imbalances.

The idea hasn't yet emerged as an official recommendation from Seoul in China's case. China's central bank governor, Zhou Xiaochuan, said during the IMF meeting that some Chinese economists also had suggested using export restraints to ease pressure between the U.S. and China, but he said it wasn't being seriously considered.

A U.S. official said the possible use of such trade constraints wasn't part of U.S.-Chinese discussions so far.