NPR.org, March 24, 2009 ·
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 U.S. dollar and Western governments.
The comments, in an
essay by the Chinese central bank governor released late Monday,
reflect 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.
In an unusual step, the essay was published in both Chinese and
English, making clear it was meant for an international audience.
"The crisis called again for creative reform of the existing
international monetary system towards an international reserve
currency," Zhou wrote.
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
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 U.S. government debt.
The currency should
be based on shares in the IMF held by its 185 member nations, known as
special drawing rights, or SDRs, the essay said. The Washington-based
IMF advises governments on economic policy and lends money to help with
Some economists have suggested
creating a new reserve currency to reduce reliance on the dollar but
acknowledge it would face major obstacles. It would require acceptance
from nations that have long used the dollar and hold huge stockpiles of
the U.S. currency.