China says G20 should monitor US Fed
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BEIJING, Nov 9 AFP
November 09 2010, 8:13PM
China's state media has issued a new broadside at the US Federal Reserve's move to prime the US economy, suggesting the Group of 20 should monitor policy shifts by the US central bank.
The Xinhua news agency said in a commentary the Fed was "risking the global recovery by following its own track for economic revival" by spending an extra $US600 billion ($A593.65 billion) buying Treasury bonds to stimulate the US economy.
The comments were published just days ahead of two key summits this week - the G20 meeting in Seoul and the Asia-Pacific Economic Co-operation forum in Yokohama, Japan - that are expected to focus on rebalancing global trade.
"There is an urgent need for the G20 ... to set up a new mechanism that effectively monitors the issuer of the international reserve currency, especially when it is not able to carry out responsible currency policies," Xinhua said.
"It is necessary for the issuer of the international reserve currency to report to and communicate with the G20 group before it makes major policy shifts."
The commentary was the latest in a barrage of criticism from Chinese officials and state-run media of US policies, especially the Fed's so-called "quantitative easing".
China and other emerging economies worry that much of the new US money will flood their financial markets, with players seeking higher non-dollar returns.
The Xinhua commentary also called for deeper reforms in global financial institutions such as the International Monetary Fund, and greater representation for developing countries - a position long held by Beijing.