China proposes new global currency

Beijing (AP): China proposes new global currency that is controlled by the International Monetary Fund, increasing the pressure world leaders meeting in London to change the financial system is dominated by U.S. dollars and Western governments.

The essay is a statement from China's central bank governor said Monday evening, the decision reflects the growth of China in economic relations. China will encourage developing countries to speak for many financial problems at the G-20 leaders in London on 2 April to discuss the global crisis.

In essays Governor Zhou Xiaochuan said it is not U.S. dollars, but is mentioned from the crisis that is very dangerous to rely on one currency for international payments. It is not normal, the essays published in two languages, Chinese and English, state that any posts for the international.

"The crisis, once again, the creative need of reform for the existing monetary system to the top of the international reserve currency," Zhou wrote.

Foreign exchange reserves is one of the units for the government to have the supplies. However, Zhou explained the proposed new currency should be used for trade, investment, commodity prices, and administracy corporation.

Beijing has been long enough and not easy to rely on the U.S. dollar for most of trade and foreign exchange deposit reserve. Prime Minister Wen Jiabao to request Washington not to take action during a crisis can destroy U.S. dollar value. Section, in Beijing at this time has the U.S. government securities (Treasuries) and other types of debt worth U.S. $ 1 trillion.

Write essays that currency should be based on how large the IMF's 185 members, known as the special drawing rights, or SDRs. IMF to give advice to government on economic policy and provide loans for the balance of payment problems.

Provide a number of economic proposals for the establishment of a new currency to reduce dependence on U.S. dollars, but this will get a lot of challenges. Moreover, many countries have long used the U.S. dollar currency and store this in a large number. "It has been many years we talk about international currency, and no meaningful progress," said Michael Pettis, finance professor Guanghua School of Management, University howl.

He added that many things related to become it, such as the different needs in each country with a variety of growth, trade surplus or deficit. Pettis describes 16 European countries that use the euro, have difficulty in managing a large monetary policy even though the economic conditions they are relatively the same. "It's hard for me to imagine how easily this world have the same currency for trade," specifically.

China emphasize the changes with a greater opportunity for developing countries in the IMF, World Bank, and other financial institutions. Russia also calls for the reform and will emphasize this issue in the London meeting.

Zhou explained the new currency to provide flexibility for the government to manage the economy more efficient because the value of the currency was not influenced by anyone.

Zhou also calls for changes in the value of SDRs that at this time, based on the value of the currency-four countries, namely U.S. dollars, euros, yen and pound. "Determining the value of the currency basket in the SDRs should be expanded to include a currency all over the country with great economic development." (Yn)