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Zhou Xiaochuan: Calls for New International Reserve Currency

Zhou Xiaochuan calls for a creative reform and improvement of the current international monetary system to maintain stability of the global economy and finance.

Dong Ning

On the eve of the London Group of 20 Financial Summit, Zhou Xiaochuan, governor of the Peoples Bank of China (PBOC), proposed in an essay on creative reform and improvement of the current international monetary system an international reserve currency. This currency would be stable in value, balanced between supply and demand, and flexible as regards total supply, thereby maintaining the stability of global finance and the economy. The head of the Chinese central bank holds that the global financial crisis reflects defects and risks in the international currency system. The goal of international monetary system reform would be to create a reserve currency that is disconnected from individual nations and able to remain stable in the long run, thus removing inherent problems caused by using credit-based national currencies.

Hu Xiaolian: No Signs of Serious Capital Outflow

Hu Xiaolian claims that there is no serious outflow of capital from China, but capital inflows have slowed.

China Foto Press

Hu Xiaolian, vice governor of the PBOC, claimed on March 23 that there had not been any serious outflow of capital from China, but noted capital inflows had slowed. With the spread of the global financial crisis, many emerging markets are experiencing large scale outflows of capital. Generally speaking, capital is still flowing into China, but “its scale and speed have decreased significantly.” Hu added that China is “fully confident” of its positive balance of international payments, as China remains one of the best markets for global investors.

Yao Jingyuan:Rebound in Waste Metals Price a Sign of Economic Recovery

Yao Jingyuan announced that the rebound in the price of scrap metal is a sign of Chinese economic recovery. China Foto Press

“The price of scrap metals in the Henan market has rallied,” announced Yao Jingyuan, chief economist of the National Bureau of Statistics of China, when he did an investigation and survey in Henan in late March. This is the latest evidence of economic recovery. Yao said it is a signal that the Chinese economy has perked up and will rally in the second half of the year. “The rebound in the price of waste metals at the end of the consumption chain reflects the fact that demand has stabilized.” He added that the fundamentals of the Chinese economy have not changed, though the economy was seriously challenged in the first quarter. “The Chinese economy will see a new period of growth in the second half of this year.”