China has taken a more aggressive stance against the U.S. dollar
Calls to China on the establishment of a supra-national reserve currency to replace U.S. dollar in world markets, could lead to a serious discussion on the future of the world monetary system, reports the publication of MarketWatch, citing the opinion of experts.
"In proposing reforms of this magnitude, China is demonstrating its growing influence on the world monetary system and is more aggressive stance in the debate about who is responsible for the imbalance in the world," – said the chief economist at Deutsche Bank in China Yong Ma.
In the past, U.S. officials have repeatedly accused China of maintaining a large trade surplus and believed the yuan undervalued. But now it's time to make a number of Beijing's claims, analysts say.
"China has thus set the tone for the summit the leaders of G20", which will not next week in Britain, said in a research note economists Societe Generale.
On Monday the head of the People's Bank of China Zhou Xiaochuan, the governor has proposed a new reserve currency.
"The aim of the reform of the global financial system should be the creation of an international reserve currency, which is not linked to specific countries and maintain stability in the long term. That would eliminate the shortcomings of the current system, where the leading role played by the national currency", – stated in Article Zhou Xiaochuan, published the official website of the bank.
U.S. President Barack Obama and U.S. officials rejected the idea, noting the "unprecedented strength" of the dollar.
"I do not believe in the need for a world currency" – Barack Obama said at a press conference in Washington. The dollar is in demand, "because investors believe the United States the strongest economies in the world with the most stable political system," added the U.S. president.
China expresses concern about the growing need to preserve the value of the accumulated U.S. Treasuries in the light of possible fluctuations of the dollar and the likely growth of sovereign credit risk America.
"Proposal Zhou Xiaochuan, has the potential to be the beginning of one of the most radical reform of the world monetary system in the coming decades", – believes Yong Ma of Deutsche Bank.