China criticises dollar
Dai Bingguo, who is standing in for the Chinese president Hu Jintao at the G8 meetings, raised questions over the dominant role of the dollar as the world's reserve currency.
By Malcolm Moore in Shanghai
Published: 8:01AM BST 10 Jul 2009
The discussion, which took place between the leaders of five emerging economies and the G8 industrialised nations, including Barack Obama, caused concern among western leaders.
"We should have a better system for reserve currency issuance and regulation, so that we can maintain relative stability of major reserve currencies exchange rates and promote a diversified and rational international reserve currency system,” said Mr Dai, according to the Chinese foreign ministry.
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China may seek to diversify reserves, World Bank President Robert Zoellick saysWhile he did not single out the dollar, Mr Dai was clearly calling for the world to diversify its reserve currency system and stabilise exchange rates among leading currencies.
China has made a series of attacks on the dollar in recent months, and went as far as to question Hillary Clinton, the US secretary of state, about the trustworthiness of the currency on her visit to China earlier this year.
A policy paper from the governor of the People's Bank of China also laid out an alternative to the dollar in the form of a special international reserve currency administered by the International Monetary Fund.
China holds nearly $2 trillion (£1.23 trillion) of foreign debt, the bulk of which is denominated in dollars, and has expressed its displeasure at the US government's huge deficits and the Federal Reserve's monetary policy. Beijing wants the US to feel obliged to sustain the value of China's assets.
http://www.telegraph.co.uk/news/worldnews/asia/china/5793308/China-criticises-dollar.html
the last sentence says a lot...the us is really hanging in there by a thread...
