They say U.S. policymakers will need to lift taxes and cut spending to balance the federal budget, which has swung from a surplus of 2.5 percent of gross domestic product (GDP) in 2000 to a deficit of just under 4 percent in 2003.

CNN: IMF: U.S. needs to balance budget

According to Goldstein, China's total current account surplus has ballooned from 1% of its gross domestic product in 2001 to 9% in 2006.

FORBES: China's Currency Problems

Mr Geithner has suggested deficit or surplus targets of less than 4% of gross domestic product as an alternative to pressing China to allow its currency, the renminbi, to appreciate faster.

WSJ: G-20 to Grill Fed on Bond Purchases

Instead, the yen's strength is a by-product of private sector recycling of the current account surplus and international purchases of Japanese assets.

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