Of note, the report, copied below, which featured prominently in international media, was difficult to find or absent from US media. The same is true of the reports of the signing in December 2010 of an agreement by China and Russia, not to denominate any international trades in US Dollar any longer, but by either nations currency.
JZ
'A product of the past': China's president says dollar should no longer be world's top currency
By DANIEL BATES
Last updated at 4:44 PM on 17th January 2011
Last updated at 4:44 PM on 17th January 2011
China’s president today raised grave questions over the future of the dollar by claiming it should no longer be used as the world’s reserve currency.
Hu Jintao said that using the American currency as the default for international trade and investment was a ‘product of the past’.
In unusually frank comments he said that even though the arrangement had stood in place since the end of Second World War, now was the time to reassess.
Tense: President Obama and China's President Hu Jintao hold a meeting at the G-20 summit in Seoul last November. The two men meet again in Washington this week
The statement will be seen as another sign of growing Chinese confidence after the Asian giant emerged relatively unscathed from the financial crisis.
America by comparison is more than $14 trillion in debt, a sizeable chunk of it financed by the Chinese.
Tomorrow Mr Hu and Mr Obama are due to meet for talks at the White House in which the so-called ‘currency wars’ will be among the topics up for discussion.
China claims that America keeping its interest rates low is causing inflation around the world, including to its own currency, the yuan.
America argues that it must do so to encourage the U.S. economy to grow, which will be good news for China and the rest of the world.
U.S. officials also claim China is deliberately keeping the yuan lower than it should be, which is harming competitiveness for poorer countries.
In the interview Mr Hu issued a veiled attack when he said that U.S. monetary policy ‘has a major impact on global liquidity and capital flows and therefore, the liquidity of the U.S. dollar should be kept at a reasonable and stable level’.
But he added: ‘The current international currency system is the product of the past’.
Elsewhere Mr Hu sought a more conciliatory tone and tried to paper over some of the differences that have divided the U.S. and China of late.
‘There is no denying that there are some differences and sensitive issues between us,’ he said.
‘We both stand to gain from a sound China-U.S. relationship, and lose from confrontation.’
And he admitted that it it is unlikely the yuan will take over from the dollar any time soon.
‘It takes a long time for a country's currency to be widely accepted in the world,’ he said.
It is unusual for Mr Hu to speak to foreign media and only responded to written questions asked by the Wall St Journal and the Washington Post that were handed to him by his foreign ministry.
The last time he spoke to the American media was in 2008, whilst his latest comments to Western media in general were to a French and Portugese newspaper in November last year.
Tensions between Beijing and Washington have recently flared over China’s refusal to condemn North Korea for its attack on the South.
Chinese officials reacted with fury when the White House congratulated Chinese dissident Liu Xiaobo for winning the Nobel Peace Prize.
In addition, the first clear pictures recently emerged of China’s prototype stealth fighter in a further sign of the country’s growing military power.
The photographs apparently showed the J-20 making a high speed taxi test, which is one of the last steps before a test flight.
Read more: http://www.dailymail.co.uk/news/article-1347984/A-product-past-Chinas-president-says-dollar-longer-worlds-currency.html#ixzz1BLXC1nGS
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