Xinhua published an article suggesting that China should take care of itself before playing a major role in the international financial system. It argued that the governor of the central bank of China, Zhou Xiaochuan’s suggestion of “replacing the US dollar” with a Super Reserve Currency under the IMF is unrealistic. Even if that happens, China may still not get more say at the IMF as it has been single-handedly maneuvered by the US for so long.
It further argued that so far China has been less impacted by the financial crisis not because China has a sound financial system, but rather because China’s financial system has not been fully opened to the world. China’s social and political systems are not yet ready for China to play the role of world financial leader.
So China should continue to remain low key. Its practical approach is to reduce the IMF’s international role by diverting the IMF into other regional financial and economic organizational roles and develop the Renminbi to make it strong enough to stand up to the US dollar and the Euro. Only when China is capable of providing the alternative currency reserve, can China have the ability to establish a just and fair international financial order.
Source: Xinhua, March 30, 2009