New wave: China calls for global currency

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Dont put your trust in the governor of the Central Bank of China.

China is calling for a new global currency controlled by the International Monetary Fund, stepping up pressure ahead of a London summit of global leaders for changes to a financial system dominated by the US dollar and Western governments.

The comments, in an essay by the Chinese central bank governor released late Monday, reflects Beijing’s growing assertiveness in economic affairs. China is expected to press for developing countries to have a bigger say in finance when leaders of the Group of 20 major economies meet April 2 in London to discuss the global crisis.

Gov. Zhou Xiaochuan’s essay did not mention the dollar by name but said the crisis showed the dangers of relying on one nation’s currency for international payments. The essay was published in both Chinese and English, making clear it was meant for an international audience. A reserve currency is the unit in which a government holds its reserves. But Zhou said the proposed new currency also should be used for trade, investment, pricing commodities and corporate bookkeeping.

Beijing has long been uneasy about relying on the dollar for the bulk of its trade and to store foreign reserves. Premier Wen Jiabao publicly appealed to Washington this month to avoid any steps in response to the crisis that might erode the value of the dollar and Beijing’s estimated $1 trillion holdings in Treasuries and other US government debt.

Source: The Hindustan Times, 25th of March.

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