ADB chief says more policies needed on imbalances

* Kuroda expects APEC to discuss global imbalances

*  Imbalance benchmark understandable

* Other factors should be considered when fixing imbalances

* China surplus dropping, but higher yuan desirable (Adds quotes, details)

By Hideyuki Sano

KYOTO Japan (Reuters) - Setting guidelines to curb global economic imbalances is an understandable policy, although other macroeconomic factors need to be considered too, the head of the Asian Development Bank said on Friday.

Asia-Pacific Economic Cooperation (APEC) finance ministers meeting in Kyoto over the next few days were likely to discuss imbalances, ADB President Haruhiko Kuroda said, noting the issue had been brought up at various conferences he had attended over the last few weeks.

“There’s almost always discussion on global imbalances or currency wars. So I expect that will be discussed at the APEC, too” Kuroda told reporters.

Group of 20 finance ministers last month sought to defuse tension over currencies, agreeing to shun competitive currency devaluations.

But a U.S. proposal to set a 4-percent cap on current account surpluses or deficits as a percentage of gross domestic product failed to garner widespread support.

A senior U.S. Treasury official said this week Washington would seek support from APEC finance ministers for “concrete guidelines” to limit trade imbalances in the hope that G20 leaders can hammer out the final language next week at a summit in Seoul.

Kuroda said it was understandable to have some kind of benchmark, but he said other factors should be considered too.

“Many oil producing countries are running a surplus larger than four percent. If they cut oil exports, they could reduce surpluses but it’s questionable whether that’s good for the world economy,” Kuroda said, adding there could be further considerations for other countries too.

Kuroda said the Chinese current account surplus had fallen a little since 2009, but a weak recovery in the developed world was playing a role and Chinese imbalance could increase again if a recovery in the developed world picks up momentum.

“Currency appreciation will make adjustment smoother and reduce concerns on inflation. So it will be desirable for China. But it is up to the Chinese government to decide how to go about it,” Kuroda said.

Many developed countries say Beijing sets the Chinese yuan artificially low, giving China a competitive advantage and triggering a large trade surplus. Chinese officials dispute this and say a faster rise in the yuan could endanger its growth.