* Group trying to avoid cornering China
* Trying to craft package of ideas including FX changes
* Concrete decisions may have to await November summit
By Randall Palmer
OTTAWA, March 23 (Reuters) - The Group of 20 leading nations is likely to put off pronouncements on the need for foreign exchange flexibility until its June summit or possibly even its November meeting, G20 officials said on Tuesday.
G20 members are engaged in a delicate dance to try to make concrete progress after the recession without appearing to corner individual members, notably China, officials from three countries said after G20 meetings in Ottawa late last week.
"China would go very defensive," said one of the officials, all of whom spoke on condition of anonymity, given the sensitivity of discussions. "They cannot lose face by being seen to be ... compelled."
A Canadian discussion paper ahead of the March 18-19 meeting of G20 representatives preparing for June's Toronto summit referred to the need for fiscal consolidation and foreign exchange rate flexibility, but officials said the meeting did not appear to directly address these topics.
Instead, last week's meeting was largely spent discussing the process of how to arrive over the coming year at a package of changes that are needed as part of a framework for eliminating global imbalances.
The June summit may list foreign exchange rates and budget deficit cuts as part of a toolbox to be used or it may simply state the obvious -- that there is a serious problem in the world economy that needs to be confronted.
Even to get the Chinese to agree to that would be seen as a major step. "You can't underestimate how problematic that is," said the official.
The Toronto meeting would then leave the November summit in Seoul to address the more contentious details as part of the overall framework that was started last year.
"The framework is supposed to be finalized by (the) Seoul (meeting)," said another official.
China, which has huge trade surpluses with the West, refuses to shoulder sole responsibility for global imbalances, pointing to trillion-dollar budget deficits in the United States and big shortfalls elsewhere in the West.
China allowed the yuan to appreciate about 20 percent on the dollar from its July 2005 revaluation until mid-2008 but it has since repegged it to the dollar, aiming to protect Chinese exporters from the global financial crisis.
Political pressure is growing in Washington to declare China a currency manipulator, with some U.S. senators threatening to slap duties on Chinese products if Beijing does not allow the yuan, also known as the renminbi, to rise.
It would have been easier for the Group of Eight (G8) to make pointed pronouncements, as they are the leading industrialized nations and do not include China and other important economies.
But last September's G20 summit in Pittsburgh decided that the newer expanded forum -- the world's top developed and emerging economies -- would be the main group for deciding important economic issues, recognizing the importance of the emerging economies even if it makes agreement tougher.
"There is not the like-mindedness there ... that characterizes the 8," said an official from an industrialized country.
On another topic confronting the G20, last week's meeting did not appear to make progress on the idea of a global tax, either on banks or on financial transactions, to try to recoup bailout money spent during the recent recession.
The United States has come out against a financial transaction tax, and Canada has opposed any imposed global financial tax, arguing that would penalize its domestic banks, which emerged from the recession relatively unscathed. (Editing by Rob Wilson and Jeffrey Hodgson)