China Urges New Money Reserve to Replace Dollar - by David Barboza
In another indication that China is growing increasingly concerned about holding huge dollar reserves, the head of its central bank has called for the eventual creation of a new international currency reserve to replace the dollar. China’s bold idea, released more than a week before world leaders are to gather in London for an economic summit meeting, also indicates that Beijing is worried that its huge dollar-denominated foreign reserves could lose significant value in coming years. China has the world’s largest foreign exchange reserves, valued at nearly $2 trillion, with more than half of those holdings estimated to be made up of United States Treasuries and other dollar-denominated bonds.
The timing of the Chinese announcement, analysts said, could also be aimed at giving Beijing more leverage to negotiate with the United States and other nations at the G20 in London on trade and on proposals about how to stabilize the global economy.
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