China said the United States should take action to stabilise the dollar, criticising Washington’s expansionary monetary policy for weakening the currency despite its key role in the global financial system.
The comments by a Chinese official at a meeting of the World Trade Organization came as the U.S. House of Representatives was set to pass a bill putting pressure on China to let the yuan rise faster.
China’s ambassador to the WTO, Sun Zhenyu, told a review of U.S. trade policy that the dollar played a unique role in the international monetary system while U.S. policy had a significant impact globally.
“We are very much concerned about how the U.S. would take practical and responsible measures to prevent the dollar glut and maintain the stability of the currency,” Sun said.
China had raised the same question at the last U.S. trade review in 2008 but had not received an answer.
Sun said the dollar had been depreciating for eight years, while the U.S. government had run a growing budget deficit, resulting from an expansionary monetary policy, particularly quantitative easing—purchases by the U.S. Fed of bonds and other assets to expand its balance sheet—since the crisis. (Reuters)