China has no plans to raise its proposal for a new global currency to replace the dollar at the G8 meeting this week but is willing to discuss it, a top Chinese diplomat said, as Chinese President Hu Jintao (胡錦濤) left for Italy yesterday.
China is not one of the G8 major economies, but is attending the meeting in the Italian city of L’Aquila as part of a group of five large developing countries.
Beijing called in March for the creation of a new currency, possibly based on the IMF’s Special Drawing Rights, created in the 1960s and used as the monetary standard for dealings between the fund and member governments.
“This international financial crisis has fully exposed the weaknesses and loopholes in the international monetary system,” Deputy Chinese Foreign Minister He Yafei (何亞非) said at a briefing last week. “If this issue is raised by leaders during the meeting, it is natural, because we are all discussing how to respond to the international financial crisis and promote recovery.”
He said Chinese officials have no plans to raise the issue but will discuss it if others raise it.
As the talks have neared, China and Russia have stepped up calls for a rethink of how global currency reserves are composed and managed, underlining a power shift to emerging markets from the developed nations that spawned the financial crisis.
“There should be a system to maintain the stability of the major reserve currencies,” former Chinese vice premier Zeng Peiyan (曾培炎) said in a speech in Beijing on Friday, highlighting China’s concerns about a global financial system dominated by the dollar.
Fiscal and current-account deficits must be supervised as “your currency is likely to become my problem,” said Zeng, who is now the head of a research center under the government’s top economic planning agency.
The People’s Bank of China said on June 26 that the IMF should manage more of members’ reserves.
Russian President Dmitry Medvedev has repeatedly called for creating a mix of regional reserve currencies as part of the drive to address the global financial crisis, while questioning the dollar’s future as a global reserve currency. Russia’s proposals for the G20 major developed and developing nations summit in London in April included the creation of a supranational currency.
“We will resume” talks on the supranational currency proposal at the G8 summit in L’Aquila from Wednesday through Friday, Medvedev aide Sergei Prikhodko told reporters in Moscow on Friday.
Meanwhile, Suresh Tendulkar, an economic adviser to Indian Prime Minister Manmohan Singh, said he was urging the government to diversify its US$264.6 billion foreign-exchange reserves and hold fewer dollars.
“The major part of Indian reserves are in dollars — that is something that’s a problem for us,” Tendulkar, chairman of the Prime Minister’s Economic Advisory Council, said in an interview on Friday in Aix en Provence, France, where he was attending an economic conference.
Tendulkar said that big dollar holders face a “prisoner’s dilemma” in terms of managing their holdings.
“That’s why I’m telling them to do this,” he said.
He also said that world currencies need to adjust to help unwind trade imbalances that have contributed to the global financial crisis.
“The major imbalances which led to the current situation, the current account surpluses and deficits, have to be addressed,” he said. “Currency adjustment is one thing that suggests itself.”
For all the complaints about the dollar, emerging markets such as India remain dependent on the currency of the US, the world’s largest economy and a US$2.5 trillion export market. The IMF said last Tuesday that the share of dollars in global foreign-exchange reserves increased to 65 percent in the first three months of this year, the highest since 2007.
Tendulkar said that the matter needs to be taken up in international talks and that it emphasizes the need for those talks to go beyond the traditional G8.
“They can meet if they want to,” he said. “The G20 has a wider role, has representation of the countries that are likely to lead the recovery process.”
AIR SUPPORT: The Ministry of National Defense thanked the US for the delivery, adding that it was an indicator of the White House’s commitment to the Taiwan Relations Act Deputy Minister of National Defense Po Horng-huei (柏鴻輝) and Representative to the US Alexander Yui on Friday attended a delivery ceremony for the first of Taiwan’s long-awaited 66 F-16C/D Block 70 jets at a Lockheed Martin Corp factory in Greenville, South Carolina. “We are so proud to be the global home of the F-16 and to support Taiwan’s air defense capabilities,” US Representative William Timmons wrote on X, alongside a photograph of Taiwanese and US officials at the event. The F-16C/D Block 70 jets Taiwan ordered have the same capabilities as aircraft that had been upgraded to F-16Vs. The batch of Lockheed Martin
GRIDLOCK: The National Fire Agency’s Special Search and Rescue team is on standby to travel to the countries to help out with the rescue effort A powerful earthquake rocked Myanmar and neighboring Thailand yesterday, killing at least three people in Bangkok and burying dozens when a high-rise building under construction collapsed. Footage shared on social media from Myanmar’s second-largest city showed widespread destruction, raising fears that many were trapped under the rubble or killed. The magnitude 7.7 earthquake, with an epicenter near Mandalay in Myanmar, struck at midday and was followed by a strong magnitude 6.4 aftershock. The extent of death, injury and destruction — especially in Myanmar, which is embroiled in a civil war and where information is tightly controlled at the best of times —
Taiwan was ranked the fourth-safest country in the world with a score of 82.9, trailing only Andorra, the United Arab Emirates and Qatar in Numbeo’s Safety Index by Country report. Taiwan’s score improved by 0.1 points compared with last year’s mid-year report, which had Taiwan fourth with a score of 82.8. However, both scores were lower than in last year’s first review, when Taiwan scored 83.3, and are a long way from when Taiwan was named the second-safest country in the world in 2021, scoring 84.8. Taiwan ranked higher than Singapore in ninth with a score of 77.4 and Japan in 10th with
China's military today said it began joint army, navy and rocket force exercises around Taiwan to "serve as a stern warning and powerful deterrent against Taiwanese independence," calling President William Lai (賴清德) a "parasite." The exercises come after Lai called Beijing a "foreign hostile force" last month. More than 10 Chinese military ships approached close to Taiwan's 24 nautical mile (44.4km) contiguous zone this morning and Taiwan sent its own warships to respond, two senior Taiwanese officials said. Taiwan has not yet detected any live fire by the Chinese military so far, one of the officials said. The drills took place after US Secretary