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Banker urges reserve diversification
(chinadaily.com.cn / Agencies)
Updated: 2006-06-28 11:59
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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.