Deal reached to track imbalances

The world’s biggest economies have reached a deal in the French capital on how to track imbalances in the global economy.

Finance ministers and central bank governors from the Group of 20 rich and developing countries managed on Saturday to get China to agree on a list of five points with which to measure imbalances, by softening the criteria for measuring current account surpluses.

“The negotiations have been frank, sometimes tense,” Christine Lagarde, the French finance minister, said, but in the end a compromise was reached.

Lagarde also said that the next step would concern the guidelines followed by “the mutual assessment process”.

She said it was “a question of being focused and determined and respectful of other people’s views. That’s what we tried to do today, that’s what we’ll try to do tomorrow. It’s an ongoing process”.

Interest payments for China’s foreign currency reserves – the world’s largest – will be excluded from the calculation of the current account balance, which measures trade and capital flows in and out of a country, one official said.

That makes the indicator a mix between current account balance – the indicator most countries wanted – and trade balance – the indicator China had been pushing for.

The breakthrough was reached thanks to intense lobbying of China by Germany and France, according to another official.

Al Jazeera’s Jacky Rowland reports from the G20 finance ministers’ meeting in Paris.