China criticises dollar

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.

While 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-criticise
s-dollar.html