China turned the tables on the US Friday, urging Washington to stop the slide of the dollar and restore equilibrium to global currency markets.
"As a major country having ownership to the most important currency in the global economy, I think the United States has the responsibility, as much responsibility as do the others, to act, to take the necessary actions to restore equilibrium in the currency market," Wang Xiaolong, a senior foreign ministry official in charge of economic affairs said.
PHOTO: AP
"It is only wise, given the weight of the US economy in the world markets, it is only wise that they would take into account the concerns of others, as well as the world economy as a whole."
Wang was speaking ahead of a China-US summit yesterday on the sidelines of the Asia-Pacific Economic Cooperation forum between US President George W. Bush and Chinese President Hu Jintao (胡錦濤).
Bush was widely expected to urge China to loosen the 10-year-old peg of the Chinese yuan to the dollar.
Critics, especially the US, maintain the yuan is undervalued and gives China an unfair trade advantage, while China has indicated it is willing to gradually loosen the peg in the short term, but not totally abandon it.
Wang refused to specify when and if China would take measures to loosen the peg, but strongly indicated that Beijing would closely watch the slide of the dollar before making any moves.
"We will wait and see because ... first we haven't seen the reaction of some of the other players and secondly we will have to see what the impact of the recent fall of the dollar will be on the world economy," he said.
Washington has been involved in a year long campaign aimed at urging China to loosen its dollar peg as a key measure to address China's ballooning trade surplus with the US. According to US statistics, China's trade surplus with the US ballooned to more than US$120 billion last year and has been growing at a record rate, totalling US$15.5 billion in September and US$15.4 billion in August.
The dollar tumbled to the lowest level against the yen for over four years on Friday as markets bet against central bank intervention to arrest the US currency's decline. The dollar fell to as low as 102.92 yen in late European trading, the lowest level since April 2000.
Meanwhile the euro scaled a peak of US$1.3067, flirting with a record high US$1.3074 seen on Thursday.
Early Friday ahead of a G20 financial meeting in Berlin, US Treasury Secretary John Snow and Federal Reserve Chairman Alan Greenspan dashed European hopes for quick relief from a weak dollar, further signalling US indifference to the slide.
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