Clinton urges transparency by state-backed firms

LOS CABOS: US Secretary of State Hillary Clinton on Sunday urged major economies to ensure transparency by state-backed companies, saying that all countries would benefit from a "rules-based system."

Senior officials from the Group of 20 major economies are holding two days of talks in the Mexican resort of Los Cabos, a deliberately informal setting aimed at stirring dialogue ahead of a full G20 summit in June.

After a group trip to watch the plentiful whales in the Pacific Ocean, Clinton told colleagues that the United States wanted the Group of 20 to make efforts to address the rise of "state capitalism" in the global economy.

While acknowledging that the US record was not perfect, Clinton said that all countries that "benefit from open, free, transparent and fair competition have a vital interest in protecting it and a responsibility to follow the rules."

"Enough of the world's commerce now takes place with the developing economies in this room that the failure of any group of nations to participate in the rules-based system would render the entire system unworkable. And that would impoverish all of us," she said.

Clinton said the G20 could find a model in the so-called Santiago Principles, the guidelines offered in 2008 under the International Monetary Fund calling for transparency by state-owned investment bodies known as sovereign wealth funds.

"We need to develop similar understandings to ensure that companies compete on a level playing field, whether their owners sit in corporate boardrooms or in government ministries," Clinton said.

The United States, where direct government involvement in business is politically taboo, has long complained about what it sees as unfair advantages enjoyed by state-backed companies in emerging competitors such as China.

Washington has complained over what it sees as Chinese state support for key industries such as solar and other clean energy. President Barack Obama last week called for China to follow global "rules" during a meeting with Vice President Xi Jinping, the rising Asian power's likely next leader.

The Group of 20, formed in 2008 amid the global financial crisis, includes major developed and developing nations that account for some 85 percent of the global economy.