China questions dollar dominance

While proposing new bilateral co-operation, Hu Jintao resists US arguments to strengthen the Chinese currency.

The Chinese president has resisted US arguments about why China should let its currency strengthen, saying the dollar-based international currency system is a "product of the past".
However, Hu Jintao admitted that it would take a long time to make China's yuan (RMB) a world currency.
"China has made important contribution to the world economy in terms of total economic output and trade, and the RMB has played a role in the world economic development," he told two US newspaper in a written interview ahead of his visit to th US next week.
"But making the RMB an international currency will be a fairly long process."
Critics say China intentionally undervalues the its yuan to make its exports cheaper and gain a trade advantage, contributing to the huge US trade deficit.
Hu said arguments that allowing the yuan to appreciate would curb inflation are too simplistic, adding that China is fighting inflation with a range of policies including interest-rate increases.Full Story