Tuesday, January 18, 2011

Hu wants dollar out, yuan in

Prior to Chinese President Hu Jintao's state visit to the US on 18-21 January, he highlighted the cooperation between the two super powers in areas of energy and space, said The Wall Street Journal on Monday.
Hu also said that the present US dollar-dominated currency system is a "product of the past." The Chinese president stressed the moves to make the yuan into a global currency.
In written answers to questions by The Wall Street and the Washington Post, Hu said, "We both stand to gain from a sound China-U.S. relationship, and lose from confrontation."
Reports said that the Chinese leader recognized "some differences and sensitive issues" between the two countries. His tone was compromising. He avoided mentioning controversial issues like the US arms sale to Taiwan, which froze the Washington-Taipei military relations.
Hu down played Washington's main economic arguments why Beijing undervalues its currency--a move that disappoints the US--giving China an unfair economic advantage by making its product cheaper in the international market and thereby boosting its exports.
This issue is sure to be on top of agenda as the Pres. Hu meets Pres. Obama in the White House this week.
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