In an April 13 article published on China’s official newspaper Global Times, a China Institute of Contemporary International Relations (CICIR) scholar, Zhang Jiye, considered the U.S. government’s inflationary economic policy to be a measure to contain the rise of China.
“Firstly, the U.S. can use the export of ‘inflation’ and depreciation of the dollar to massively devalue China’s foreign exchange reserve, empty China’s strategic assets, and delay China’s rise. Secondly, the U.S.’s low interest and low exchange rate policy will amplify the expectation of the yuan’s appreciation, further attracting international hot money into China and exacerbating China’s stock market and housing bubbles. Thirdly, the dollar depreciation could push up commodity prices, deepen China’s inflation introduced by importation, and cause social instability.” Zhang suggested that the government unpeg the yuan from the dollar and diversify China’s foreign asset structure.
Source: Global Times, April 13, 2010
http://opinion.huanqiu.com/roll/2010-04/775740.html