PARIS — Treasury Secretary Timothy Geithner took direct aim at China on Saturday at a meeting of the world's most powerful economies, saying that the nation's currency was still "substantially undervalued" and that recent steps taken by Beijing to adjust its value were too small.
Meeting in Paris over the weekend, financial leaders from the Group of 20 agreed on a set of guidelines to identify when economic and financial developments in some countries would create problems for the rest of the world. The agreement was forged after France and Germany persuaded China to accept a compromise that includes measuring a country's currency exchange rate as a gauge of the potential problems.
Even though China has allowed its currency, the yuan, to appreciate against the dollar since last summer, it has not been enough, Geithner said. As such, the United States and its European partners say, China still retains an unfair edge in trade that is contributing to a two-speed global economy.
Geithner's blunt assessment added to a yearlong drumbeat that the United States has led, aiming to push Beijing to let the value of its currency rise and address its trade imbalance, pressure the Chinese have stiffly resisted.
Nevertheless, China did agree to compromise language on the yardsticks measuring imbalances in the global economy.
These guidelines are a "first step," said Christine Lagarde, the finance minister of France, which is leading the G-20 this year.
The guidelines grew out of concerns that fast growth in China and other emerging markets would stoke inflation and trade imbalances that could destabilize a recovery, even as advanced countries struggle to overcome lagging growth and high unemployment in the wake of a recession.
Dominique Strauss-Kahn, the head of the International Monetary Fund, said that while the financial crisis was over, "the social crisis is still there, and very strong. If you have growth that doesn't transform into jobs, what does that mean for the man in the street?" he asked.
Jobs and growth are also a major concern in North Africa and the Middle East, where demands for greater democracy and equality have emerged in part from a paucity of economic opportunity, a concern cited by the leaders gathered in Paris.