Cameron urges China to correct 'dangerous' trade imbalances

Globalisation could “go into reverse”, harming economies around the world, unless China acts to correct dangerous trade imbalances, British Prime Minister David Cameron warned today.

On the eve of a G20 summit at which Beijing will face pressure to allow faster appreciation of its yuan currency, Mr Cameron warned that the massive surpluses created by China’s export success had created “a dangerous tidal wave of money” sweeping around the world.

His warning came in a speech to students at Peking University in which he also risked infuriating the Communist authorities by extolling the virtues of political democracy and a free press and saying he hoped China would develop towards “a greater political opening”.

Mr Cameron accepted that Britain’s society was “not perfect” and insisted he was not trying to lecture the Chinese or claim a position of “moral superiority”.

But he said Britain’s democratic traditions “make our government better and our country stronger”, adding: “The rise in economic freedom in China in recent years has been hugely beneficial to China and to the world.

“I hope that in time this will lead to a greater political opening, because I am convinced that the best guarantor of prosperity and stability is for economic and political progress to go in step together.”