From The Caijing Magazine (in Chinese), translated by Chi Chung via The Press Interpreter:
By the time the Olympics is held in Beijing in 2008, China’s foreign currency reserve might exceed 1 trillion USD. We believe that the highly concentrated flow of capital directed by China’s Foreign Reserve Management Bureau will influence the world financial market, in a way similar to those of the petro dollars in the 70s and the Japanese USD in the 80s. Thus we call it Chinese USD.
We think, even if Renminbi (RMB) were no longer pegged to the USD, RMB would continue to be undervalued, in order to have more employment opportunities and to promote export. If RMB were to be kept undervalued, other Asian currencies would follow the path, for the sake of competitiveness. The central banks of the Asian countries have the mission to create employment and promote export, not that of creating values. Thus, the deficit the United States has will continue to exist for a period of time longer than that held by the prevailing opinions now in the market.
