Underlining the global concerns, Chief Executive Donald Tsang Yam-kuen said in Japan that the American credit injection could inflate Asian asset bubbles and trigger a repeat of the 1997-98 financial crisis.

The G20 leaders brokered a communique aimed at appeasing all parties but which may not achieve anything concrete.

The two-day G20 summit, which closed yesterday, was overshadowed by surging capital flows into emerging economies as the US Federal Reserve added US$600 billion in an attempt to reflate the American economy.

Tsang, addressing a business forum, said Hong Kong must guard against a risk of "unprecedented market turbulence".

"I am very much concerned about the impact of the US second round of quantitative easing on Asian economies. This has increased the risk of asset bubbles, which will impact on our financial stability as well as regional and global economic growth."

The sentiment was widely echoed among leaders in Seoul. In the statement issued after their meeting, they said emerging markets could adopt regulatory steps to cope with excessive liquidity. Brazil, Indonesia and South Korea have already imposed restrictions on investment inflows to defuse the danger of hot money.

In the run-up to the summit, the US and China bickered over trade and currency policy. US Treasury Secretary Timothy Geithner vowed to rally other G20 powers to push China for currency reform at the summit. But America's unrestrained printing of money has, in turn, alarmed many nations, prompting criticism even from its traditional allies in Europe.

Facing the prospect of currency wars, G20 leaders patched over their differences and agreed to a vague framework that promises to bring global imbalances under control.

A joint statement issued by leaders including President Hu Jintao and US President Barack Obama tried to create a sense of unity. But deep divisions among the countries mean the communique was a watered-down agreement.

It was deemed by some as "a step forward" from the June summit in Toronto, as it touched on hot issues such as exchange rates trade imbalances. The communique made a commitment to "moving toward a more market-determined exchange rate system, enhancing exchange rate flexibility and refraining from competitive devaluation of currencies".

But it steered clear of the term "competitive undervaluation" - which the US wanted and was used to target China more specifically.

On the other hand, it did not address the excess of credit some blamed on the United States. The communique only carried a line in principle saying that "advanced economies, including those with reserve currencies, will be vigilant against excess volatility and disorderly movements in exchange rates".

More critical analysts worried that the communique lacked detail and substance.

Citi Investment Research economist Shen Minggao said: "The deal didn't reach concrete measures to erase the possibility of a currency war."

Hu was gloomy in his final remarks before the communique was issued, calling for global resistance to trade barriers while painting a bleak picture of the global economy - an apparent dig at recent US policy.

"The international financial markets are volatile, the fluctuation in the major currencies is large, prices of commodities are high, and there is a clear rise in protectionism."

Without naming the US, Hu called on major reserve-currency economies to adopt "responsible policies and maintain relatively stable exchange rates".

Obama reiterated after the agreement that China's currency policy was an "irritant" for the US and other trading partners. "China spends enormous amounts of money intervening in the market to keep it undervalued," he said. "We understand that this is not solved overnight. But it needs to be dealt with, and I am confident it can be."

The leaders, nonetheless, agreed to setting guidelines to assess "persistently large imbalances" under an existing IMF mechanism where member countries carry out periodical review of each other.

The Seoul summit showed the growing clout of emerging countries such as China and India.

French President Nicolas Sarkozy, host of the next G20 summit, said China had already offered to host the first working group seminar for the finance minister meetings next year.

G20 has emerged as the premier forum for dealing with economic issues since the financial crisis, but it shows signs of weakening momentum since the world moves from crisis management to building a financial system to ensure sustainable growth.

Professor Gregory Chin, of the Centre for International Governance Innovation in Canada, said the meeting showed a general theme of  moving away from the "Washington consensus".

He said the new G20 approach has incorporated elements of development lessons from China and other major emerging nations.