China economist blasts dollar dominance on eve of G20

[FreakinDJ]

Source: Reuters

China economist blasts dollar dominance on eve of G20

Dollar dominance is sowing the seeds of financial turmoil, and the solution is to promote new reserve currencies, a Chinese government economist said in a paper published on the eve of a G20 meeting about how to reform the global monetary system.

Although not an official policy statement, the paper by Xu Hongcai, a department deputy director at the China Center for International Economic Exchanges, offered a window onto the domestic pressures bearing on Beijing to move away from a dollar-centric global economy.

The China Center, a top government think tank, has represented the Chinese government in organizing a forum on Thursday in Nanjing that will bring together finance ministers, central bankers and academics from the Group of 20 wealthy and developing economies.

Xu's paper, "Reform of the international monetary system under the G20 framework," was published in Chinese on the center's website this week (www.cciee.org.cn).

Read more: http://www.reuters.com/article/2011/03/30/us-china-g20-dollar-idUSTRE72T1E020110330

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Ever get that feeling of being kicked while your down

[xchrom]

1. recommend

[Kip Humphrey]

2. of course, China could always de-link the yuan from the dollar

but then, what would happen to Wall(of China)mart?

[amandabeech]

3. I couldn't agree more,.

However, the yuan would then appreciate dramatically and Chinese products would no longer be cheap in dollars. The appreciation would be 20-40%, from estimates that I've seen.

That, however, would likely result in foreign companies moving production to cheaper locations like Vietnam or back to the U.S. where the jobs came from originally.

Of course, China avoids floating the yen because it wants to avoid the consecuences.

It wants its rice cake and wants to eat it, too.