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China To Challenge US Dollar Reserve Currency Status

Posted By admin On October 4, 2012 @ 7:44 am In Money Watch | Comments Disabled

Gold Core [1]
October 4, 2012

China is actively taking steps to phase out the US dollar which will decrease volatility in oil and commodity prices and deride the ‘exorbitant privilege’ the USA commands as the issuer of the reserve currency at the centre of a post-war international financial architecture which is now failing.

In 1971, U.S. Treasury Secretary John Connally said, “It’s our currency and your problem”.

China is frustrated with what it sees as the US government’s mismanagement of the dollar, and is now actively promoting the cross-border use of its own currency, the yuan, or also called the renminbi, in trade and investment.

China’s goal is to decrease transactions costs for Chinese importers and exporters.

Zha Xiaogang, a researcher at the Shanghai Institutes for International Studies, said Beijing wants to see a better-balanced international monetary system consisting of at least the dollar, euro and yuan and perhaps other currencies such as the yen and the Indian rupee.

“The shortcomings of the current international monetary system pose a big threat to China’s economy,” he said. “With more alternatives, the margin for the U.S. would be greatly narrowed, which will certainly weaken the power basis of the U.S.”

Zha’s comments were highlighted at a seminar in Bahrain this week on the geopolitics of currencies organized by the International Institute for Strategic Studies, a London think tank.

Full story here.


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URLs in this post:

[1] Gold Core: http://www.goldcore.com/goldcore_blog/china-challenge-us-dollar-reserve-currency-status

[2] China’s yuan ‘set to usurp US dollar’ as world’s reserve currency: http://www.prisonplanet.com/chinas-yuan-set-to-usurp-us-dollar-as-worlds-reserve-currency.html

[3] China “Attacks The Dollar” – Moves To Further Cement Renminbi Reserve Currency Status: http://www.prisonplanet.com/china-attacks-the-dollar-moves-to-further-cement-renminbi-reserve-currency-status.html

[4] Has the Dollar ALREADY Lost Its Status As World Reserve Currency?: http://www.prisonplanet.com/has-the-dollar-already-lost-its-status-as-world-reserve-currency.html

[5] As US dollar loses global reserve status, America won’t be able to keep printing new money: http://www.prisonplanet.com/as-us-dollar-loses-global-reserve-status-america-wont-be-able-to-keep-printing-new-money.html

[6] Bundesbank Warns China’s Currency “On Its Way To Becoming Global Reserve Currency”: http://www.prisonplanet.com/bundesbank-warns-chinas-currency-on-its-way-to-becoming-global-reserve-currency.html

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