China central banker urges reserve diversification
(chinadaily.com.cn / Agencies)
Updated: 2006-06-28 11:59
But the upshot, in Summers's view, is "the central, global financial irony of
our times": Countries that need capital to finance rapid development are
shipping more money to the United States than is flowing in the opposite
direction, the Washington Post reported.
Asian central banks have amassed about $2.8 trillion in foreign exchange
stockpiles.
Wu was cited by the paper as saying that Asian countries needed to hold large
amounts of foreign exchange reserves to allow them to deal with liquidity crises
because they could not be assured of timely help from the international
community.
The newspaper also cited Wu as saying a stronger yuan alone could not correct
China's large trade surplus with the United States.
The Sino-U.S. trade gap was the result of global resource allocation by
multinational companies and needed to be addressed through the combined efforts
of the United States and Asian countries, she said.
"Such trade imbalances cannot be resolved simply by adjusting the exchange
rate. It should be mainly resolved by adjusting the economic structure," Wu was
quoted as saying.
China faces pressure, especially from the United States, to allow a faster
rise for the yuan.
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