IT'S naive to believe that a two-day meeting can save the world economy from faltering.

That may be true, but hopes invariably ride high when the leaders of the 20 most powerful economies in the world gather in one room to talk.

That was the case when the Group of 20 met in Seoul for its first summit in Asia. The meeting, which concluded on Friday, was long on words and short on action. The outcome disappointed those who believe that the world economy can't emerge from its current crisis if nations don't act in concert to redress problems that interconnect the global economic order.

The G20 leaders did set vague "indicative guidelines" to measure imbalances among their varied economies at different stages of development and speed but left the details to be discussed next year, allowing time to temper some of the strains and schisms that have been building up in recent months.

Market-driven rates

In the final communiqu?? capping the fifth meeting of the G20 since the world financial crisis erupted in 2008, Chinese President Hu Jintao, United States President Barack Obama and the 18 members of the elite economic club vowed to move toward market-driven exchange rates and shun "competitive devaluations."

The G20 also agreed to allow "carefully designed" control measures for emerging markets struggling to contain the huge capital inflows coming into their countries. Those countries blame the US policy of further "quantitative easing," which pushed down the value of the dollar and drove money offshore looking for higher rates of return.

The leaders also agreed that there was a critical, but narrow, window of opportunity to conclude the long-elusive Doha round of trade liberalization talks launched in 2001.

The bland promises to deal with trade imbalances did not appear weighty enough to bring about any real transformation in the global economic order.

"There is no good reason to think that any country will actually do anything different as a result of the commitments made at the summit," Julian Jessop, chief economist with Capital Economics, was quoted by Reuters as saying in his note.

The International Monetary Fund has warned that gaps between cash-rich exporting nations and debt-laden importers are widening to pre-crisis levels.

However, Obama tried to sound an upbeat note.

"The work that we do here is not always going to seem dramatic," Obama told a news conference after the summit. "It's not always going to be immediately world-changing. But step by step we're building stronger international mechanisms and institutions that will help stabilize the economy, ensure economic growth and reduce some tensions."

Markets, of course, prefer action to words. They want to see the world's biggest economies moving to resolve growing currency rifts, defuse trade tensions and prevent a double-dip recession.

"China is unlikely to ditch its policy of gradualism," said Ben Simpfendorfer, Royal Bank of Scotland's economist in China. "Neither is the G20 a likely forum for abrupt change."

"A few months ago, China was under pressure from both developed and developing governments to allow larger yuan gains," he said. "But the tables have since turned, and the US now finds itself facing pressure owing to its new quantitative easing."

The Federal Reserve's new US$600 billion round of quantitative easing, announced a week ahead of the Seoul summit, angered many G20 nations, including China, Brazil and Germany. They accused the US of trying to weaken the dollar to boost US exports, ignoring the global repercussions the policy is likely to provoke.

The US, meanwhile, has long been badgering China to allow the yuan to rise faster, accusing China of keeping the currency artificially low to help its export sector.

China has not taken the criticism lying down. It fired back that the yuan is being made the scapegoat for US problems. It says the debt-driven growth model of the US has collapsed and Washington is trying to point the finger of blame elsewhere. That view gained credence among other G20 members after the Fed announced more quantitative easing, which is a polite term for printing more money.

"China has less incentive to accede to US demands at this point and has long argued that rebalancing must take place simultaneously in both China and the US," Simpfendorfer said.

US rebuffed

Ahead of the summit, Chinese Vice Foreign Minister Cui Tiankai rejected a US proposal to push for targets to shrink current-account deficits. He said China would not accept any attempt to single out the yuan's exchange rate at the G20 summit.

"The artificial setting of a numerical target cannot but remind us of the days of a planned economy," Cui said. "If any country or any individual sets a target for China on the appreciation of the yuan, it requires us to manipulate the exchange rate and we surely won't bow to that."

The G20's wording of "competitive devaluations" is slightly different from the "competitive undervaluation" favored by the US, which takes sharper aim at China.

The yuan has long been in the spotlight as attention focuses on the exchange-rate impact of global trade. At the same time, the yuan also plays a key role in policies used by China to manage its growth.

Domestically, concern about inflation would suggest pressure for a stronger currency but a faster-track appreciation in the yuan isn't likely, economists said.

China's Consumer Price Index rose to a 25-month high of 4.4 percent in October on an annual basis and shows no sign of immediate cooling. A higher yuan would make imports cheaper and help tame inflation.

The yuan rose to 6.6173 against the dollar on November 11, the highest level since 1993. That high was struck on the day Chinese price data were released and on the first day of the G20 summit.

The People's Bank of China has previously made the link between inflation and the yuan, but no sharp rise is likely though "the pace of appreciation may strengthen modestly," Simpfendorfer said.

Q: What's G20?

A: The Group of 20 was established in 1999, in the wake of the 1997 Asian Financial Crisis, to bring together major advanced and emerging economies to stabilize the global financial market. Since its inception, the G20 has held annual Finance Ministers and Central Bank Governors' Meetings and discussed measures to promote the financial stability of the world and to achieve a sustainable economic growth and development.

Q: What's G20 Summit?

A: To tackle the financial and economic crisis that spread across the globe in 2008, the G20 members were called upon to further strengthen international cooperation. The G20 Summits have been held in Washington in 2008, in London and Pittsburgh in 2009 as well as Toronto in June and South Korea in November.

Q: Who are the G20 members?

A: They are China, the United States, Japan, the United Kingdom, France, Germany, Italy, Canada, South Korea, Russia, India, Indonesia, Argentina, Brazil, Mexico, Australia, South Africa, Saudi Arabia, Turkey and the European Union.

Q: What's the significance of the G20?

A: Collectively, the G20 economies comprise 85 percent of global gross national product, 80 percent of world trade, including EU intra-trade, and two-thirds of the world population.

Q: What are the challenges of this G20 summit held in South Korea?

A: Leaders are divided on the challenges, which include the US wanting China to allow its yuan to rise. Several nations are irate over the US Federal Reserve's plans to pump US$600 billion of new money into the faltering American economy.