Awakening Lion Acts Tough on Sino-US Relations
Chinese President Hu Jintao called the U.S. dollar-dominated currency system “product of the past” and highlighted China’s moves to turn its RMB into a global currency before a state visit to Washington this week.
President Hu made such tough remarks in an interview with The Wall Street Journal and the Washington Post. He played down the U.S. argument that pressuring China to appreciate its currency.
Washington has long been accusing China of hurting U.S. manufacturers by manipulating Chinese currency to make U.S. exports less competitive. Last week, U.S. Treasury Secretary Geithner urged China to increase value of its RMB to avoid risks of seeing domestic inflation accelerate or a damaging rise in asset prices. President Hu rejected such suggestions and said that “China had made important contribution to the world economy in terms of total economic output and trade and the RMB had played a role in the world economic development.” At the same time, President Hu criticized U.S. Federal Reserve’s huge bond purchases to keep down long-term interest rates as fueling inflation in other countries, including its own.
Chinese President Hu Jintao seldom receives western newspaper interviews. Such high-profile presence under the media spotlight indicates that China lays great importance on the president’s state visit. The U.S. President Barack Obama also shows his great emphasis on the summit with his Chinese counterpart by announcing the visit one month ahead.
Since Obama’s state visit to China in November 2009, the focus has shifted from cooperation to tensions in Sino-US relationship. Issues such as frictions over the South China Sea, the right in the Yellow Sea, North Korea provocations, Taiwan weapon purchase, human rights and Dalai Lama’s visit to the White House, and trade and economics have been straining the bilateral relations. The rarely tough gesture by Chinese President Hu Jintao shows China’s confidence in handling foreign affairs and resolution to gain an equal position in conversation with the super power U.S.
“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.
The President also said that it would be a fairly long time before the RMB become an international currency.
Earlier this week, the Chinese military successfully performed the first test flight of the advanced J-20 fighter during Robert Gates, the U.S. Defense Secretary’s visit to China. Experts imply that the test is a message for countries that are concerned about China’s military power. Chinese military denies such statement.