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China Takes Giant Step Towards Making the Yuan the World’s Reserve Currency
For years, I’ve been writing about the long-term decline of the Dollar, and the rise of the Chinese Yuan … and it’s potential to become the world’s next reserve currency.
As I pointed out in 2007, many countries have started moving out of the Dollar as the basis for international trade settlements, including:
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Venezuela and 12 other Latin American countries as well as Cuba
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Many other countries
In 2008, I wrote: Read more…
China cracks down on call for ‘Jasmine Revolution’
The Associated Press
Saturday, February 19, 2011; 10:05 AM
BEIJING — Chinese authorities cracked down on activists as a call circulated for people to gather in more than a dozen cities Sunday for a “Jasmine Revolution.”
The source of the call was not known, but authorities moved to halt its spread online. Searches for the word “jasmine” were blocked Saturday on China’s largest Twitter-like microblog, and the website where the request first appeared said it was hit by an attack.
Activists seemed not to know what to make of the call to protest, even as they passed it on. They said they were unaware of any known group being involved in the request for citizens to gather in 13 cities and shout “We want food, we want work, we want Read more…
China top bank sees explosive growth in gold demand and voracious appetite for silver
SHANGHAI (Reuters) –
Demand in China for physical gold and gold-related investments is growing at an “explosive” pace and its appetite for the yellow metal is poised to remain robust amid inflation concerns, said an Industrial and Commercial Bank of China (ICBC) executive.
ICBC, the world’s largest bank by market value, sold about 7 tonnes of physical gold in January this year, nearly half the 15 tonnes of bullion sold in the whole of 2010, said Zhou Ming, deputy head of the bank’s precious metals department on Wednesday.
“We are seeing explosive demand for gold. As Chinese get wealthy, they look to diversify their investments and gold stands out as a good hedge against inflation,” Zhou told Reuters.
“There is also frantic demand for non-physical gold investments. We issued 1 billion yuan worth of Read more…
China sees U.S. stoking Brazil and India anger over yuan
By Zhou Xin and Koh Gui Qing
BEIJING (Reuters) – The United States has incited Brazil and India to criticize China’s currency policy, but Beijing need not worry too much because it can defuse the tension through talks, a series of Chinese government advisers told Reuters.
Independent analysts warned, however, that a belief that Brazil and India are doing Washington’s bidding and are not truly aggrieved could make Beijing complacent and undermine fledgling ties between the emerging powers.
Increasingly widespread calls for a stronger yuan are awkward for China, which is accustomed to facing U.S. pressure over its tightly controlled exchange rate but has long tried to cast itself as the natural ally of other developing nations.
Brazil and India are unlikely to be any more successful than the United States in persuading Beijing to permit faster appreciation, researchers in Chinese government think tanks said.
“They must realize that the root of problem is not China but Read more…
Chinese President Hu Disses the Dollar; Says U.S. System is a ‘Product of the Past’
“The current international currency system is the product of the past,” Hu noted in answers to questions submitted to his foreign ministry office by The Wall Street Journal and the Washington Post.
BEIJING—Chinese President Hu Jintao emphasized the need for cooperation with the U.S. in areas from new energy to space ahead of his visit to Washington this week, but he called the present U.S. dollar-dominated currency system a “product of the past” and highlighted moves to turn the yuan into a global currency.
“We both stand to gain from a sound China-U.S. relationship, and lose from confrontation,” Hu said in written answers to questions from The Wall Street Journal and the Washington Post.
Hu acknowledged “some differences and sensitive issues between us,” but his tone was generally compromising, and he avoided specific mention of some of the controversial issues that have dogged relations with the U.S. over the past year or so—including U.S. arms sales to Taiwan that led to a freeze in military relations between the world’s sole superpower and its rising Asian rival. Read more…
Obama’s Push for China Currency Changes Could Cost U.S. Consumers
When President Obama meets with Chinese President Hu Jintao this week, one of the top items on the agenda will be resolving a dispute over how China sets the value of its currency. If Obama gets his way, it could spur U.S. exports, but it could also mean higher prices for American consumers.
For over a decade, China has held down the value of its currency, the Yuan, in relation to the dollar. That helps keep the cost of the goods Americans buy from China low and the price of American goods sold in China high. The cheap Chinese currency has helped open a wide trade imbalance between the two countries. In 2010, China’s trade advantage with the U.S. was more than $252 billion.
The Obama administration has made stopping China’s currency manipulation a central focus of the president’s push to increase American exports.
“China still closely manages the level of its exchange rate and restricts the ability of capital to move in and out of the country,” Treasury Secretary Timothy Geithner said is a speech last week. “As the [International Monetary Fund] has said consistently, these policies have the effect of keeping the Chinese currency substantially undervalued.”
On the surface, it’s a positive for Read more…
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