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“But that is improbable to occur, claims Robert Scott, senior world economic guru with the Commercial Policy Institute,” reported Forbes.

That implies China’s investments in U.S. dollars, thru Treasuries, would lose a 3rd of their price in yuan terms.

Chinese leaders’ heavy investment in the States economy has exposed them to domestic criticism.”. “Zhou made his call in an essay that appeared on the site of Folk’s Bank of China, China’s central bank, on Monday,” reported the Washington Post. “It was obviously timed to make a dash in the run-up to the G20 meeting that starts in London on Apr 2.

The IMF would operate such a currency thru its “Special Drawing Right,” made in 1969 with “the potential to act as a super-sovereign reserve currency,” reported Times Online. “The role of the SDR hasn’t been put into full play due to limitations on its allocation and the extent of its uses. However, it serves as the light in the tunnel for the reformation of the world financial system,” Zhou wrote in his essay. He also emphasised his hope for the IMF currency’s supremacy over other dominant world baselines, for example the Euro dollar and the yen.

The technical and political hurdles to implementing the suggestion are enormous, so even if backed by other countries, the suggestion is improbable to modify the dollar’s role in the near term. “‘The re-establishment of a new and widely accepted reserve currency with a stable valuation baseline may take a long time,’ Mr Zhou said” in a report by the Wall St Book . “In remarks earlier Mon. , one of Mr Zhou’s assistants, Hu Xiaolian, further said that the dollar’s dominant position in global trade and investment is doubtful to modify in the future. Ms Hu is responsible for reserve management as the head of China’s State Administration of foreign exchange.
“A spokeswoman for the U.S. Treasury declined to comment on Mr. Zhou’s views.”