China’s Hu Jintao: Currency system is ‘product of past’

– Yes, this writing on the wall will be hard for folk in the U.S. to accept – that they are no longer the financial center of the world.   It’s coming.     If you watch the news flowing by, you will have seen a steady and increasing drum beat of calls to end the era of the U.S. dollar being the world’s reference currency.  And when that era ends, there are going to be big changes for the US, sad to say.  – Dennis

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Chinese President Hu Jintao has said the international currency system dominated by the US dollar is a “product of the past.

Mr Hu also said China was taking steps to replace it with the yuan, its own currency, but acknowledged that would be a “fairly long process”.

The remarks to two US newspapers come ahead of a state visit by the Chinese leader to Washington this week.

They reflect continuing tensions over currency issues between the two powers.

The remarks to the Washington Post and Wall Street Journal came in the form of written responses to questions. Mr Hu also reiterated criticism of a decision by the US Federal Reserve to inject $600bn into the economy, which some argue will weaken the dollar at the expense of other countries’ exports.

“The monetary policy of the United States has a major impact on global liquidity and capital flows and therefore, the liquidity of the US dollar should be kept at a reasonable and stable level,” President Hu said.

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