Xinhua republished an article originally from Huaxi Metropolitan Daily, a Sichuan based newspaper, that discussed turning the U.S. debt crisis into China’s opportunity. The article stated, “At present, it appears (China) will be subject to loss no matter what currency it has. In this situation, when the American dollar, the euro, the British pound, and the Japanese yen all are depreciating, the most important thing for China is to promote internationalization of the Chinese renminbi. To decrease China’s loss, the active administration of foreign currency reserves is no longer the best solution. Only by pushing the renminbi out may (China) find a better solution.”
“There is no doubt that the problem of the U.S. sovereign debt is a crisis, but it may also be transformed into an opportunity. The sub-prime loan crisis that happened on American soil has shaken the financial system that has the U.S. dollar as its core. The current downgrade of the credit rating of the U.S. debt has further loosened the dollar’s credit. With expected future depreciation, many international enterprises that export goods to the U.S. will inevitably turn to other alternative currencies for settlement. Investors are also gradually investing in other currencies for better gains. Due to the U.S. debt crisis, the Japanese debt crisis, and the soft euro, more and more countries have also expressed the desire to reform the international currency system and have the right to more freedom in choosing the international reserve currency. All these have provided opportunities and conditions for the internationalization of renminbi.”
Source: Xinhua, August 8, 2011
http://news.xinhuanet.com/comments/2011-08/08/c_121826284.htm