Leaders of the world's biggest economies papered over their differences at the G20 today with agreement to develop new guidelines to prevent so-called "currency wars".
The deal falls well short of the 4% limit on national trade deficits and surpluses proposed by US President Barack Obama, which was blocked by exporting countries China and Germany.
Washington and Britain have accused Beijing of keeping the value of its yuan currency artificially low to make its exports cheap, fuelling the massive trade imbalances which played a part in the 2008 crisis.
President Obama appeared to sharpen his criticism in the wake of the agreement, insisting that exchange rates "must reflect economic realities".
"Emerging economies need to allow for currencies that are market-driven," he said. "This is something that I raised with President Hu of China and we will closely watch the appreciation of China's currency."
However, Prime Minister David Cameron hailed the outcome as "good for British jobs, good for British businesses and good for British exporters".
Mr Cameron acknowledged that the agreements made at Seoul were not "heroic" in the way the emergency plans drawn up at London and Pittsburgh to stave off global depression at the height of the crisis were.
But he brushed off suggestions that the G20 had become an irrelevant talking shop or that Britain had been no more than a spectator to an argument between China and the USA - the so-called G2.
The Seoul summit made progress on its three key challenges of endorsing plans to reduce national deficits, boosting trade and putting in place arrangements to address global imbalances, he said.
The problem of trade imbalances, which has seen countries like China build up massive reserves on the back of booming export industries while the high-consuming West has become mired in debt, "was never going to be solved overnight", said Mr Cameron.
But he added: "The key thing is, it is being discussed in a proper multilateral way without resort to tit-for-tat measures and selfish policies.
"It is not just that there is an absence of war - an absence of trade war - there is, I believe, real presence of real progress."
China was gradually moving in the direction of increasing domestic consumption, which would help develop a market for the luxury goods of the West among its burgeoning middle classes, said Mr Cameron.
"Slowly, slowly, China is moving into a position of actually increasing domestic consumption and rebalancing its economy, and this G20 is a helpful marker in that progress," he said.
"I always said it wasn't going to be heroic, but I think it's good and steady progress."
He rejected suggestions that the US and China were at daggers drawn, saying that while there had been hard negotiations lasting long into the night, the summit had seen "relatively good-natured conversations and a relatively good-natured agreement that does put imbalances up-front and centre".
He added: "This is an organisation, the G20, that did well in a crisis, that earned its reputation and it wants to do well in a recovery.
"It has a shared view about what needs to happen with the world economy. It wants to set out a shared pathway and I think it is quite a compelling story that it tells.
"Yes, there are pressures and tensions, but it is right they should be addressed in a meeting like the G20, rather than spill over into bilateral action that can be very harmful for the rest of the world."
And he said: "I think Britain has a very strong and large role in the world.
"What we are doing is relinking Britain with the fastest-growing parts of the world to make sure we secure our prosperity and our security. If you look at Britain's role at this G20, I would argue that we played a very central role."
Chancellor George Osborne compared the compromise deal to the Bretton Woods meeting which created a global economic framework for the post-Second World War world.
He said the communique produced at the end of the Seoul summit included "an explicit recognition that people need to move towards market-determined exchange rate system and that exchange rate flexibility should reflect underlying economic fundamentals".
Mr Osborne also welcomed the communique's recognition that 2011 will provide a "critical window of opportunity" to complete the Doha Round of trade liberalisation negotiations.
In what he termed a "hard-fought achievement for the UK", it includes language committing G20 members to completing and ratifying Doha, which has languished in negotiations for almost a decade since its launch in 2001.
Mr Cameron's visit to South Korea followed a two-day trade mission to China in which deals worth an estimated £2 billion for UK firms were sealed.
He said that his aim was to link Britain to the fastest-growing countries and fastest-growing regions in the world to help drive up the exports needed to reduce the national deficit.
"We have protected and promoted our national interest this week in Asia," said Mr Cameron.
"It has been a good week for Britain in the world."Reuse content