Thursday, May 28, 2009

China Thinks Beyond the Dollar

On May 28, 2009, Dr. Wenran Jiang was quoted in the BusinessWeek on China's concerns over the weakness of US dollar and its potentially negative impact on China's vast foreign currency reserves, 70% of which are estimated to be in dollar assets.

Dr. Jiang points out that well-informed Chinese now realize Beijing's strategy of keeping the yuan artificially low vs. the dollar to stoke exports—and then recycling export earnings back into the U.S. Treasury market—has backfired. Chinese blogs rant about "irresponsible investment policies of the Chinese government, which also happen to be subsidizing the U.S. economy.

You can read the article here.

Central banker Zhou wants a new global currency to supplant the greenback
Illustration by Sean McCabe; Photograph of Zhou by Zhang Peng/Imaginechina/ZUMA Press

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