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Experts: Gold standard unfeasible

11-11-2010 14:18 BJT

For more on Zoellick's comments, CCTV spoke to some Chinese experts.

Most Chinese experts think Zoellick's suggestion is more about shifting focus, than actually calling for a return to the gold standard. Some experts also believe Zoellick is simply igniting discussion on reform of international monetary policy. The timing of his suggestion is critical, just ahead of the G20 summit.

Lian Ping, Chief Economist of Bank of Communications said "Recently, the world has been on the verge of a currency war, and possibly even a trade war. So Zoellick's proposal may attract more attention at the G20 summit, and it could help solve the problems of the international financial system and easing ongoing currency tensions."

Experts say if taken literally, Zoellick's advice is reasonable but not very feasible. The termination of the Bretton Wood System means gold is not sufficient to support international trade. A gold standard for exchange rates would be difficult to implement. Zoellick says gold should be used as a reference point, or an alternative monetary asset.

Some experts also say the Renminbi should play a more important role in the global currency system of the future.

Xia Bin, Academic Advisor of People's Bank of China said "China is leading the Asian economy, it is the engine. From the perspective of regional economy and trade, the Renminbi is playing an increasingly important role. Accordingly, we should give more scope to the renminbi, in order to promote cooperation between Asian countries."

The World Bank president has since clarified his comments. He says he's not calling for a return to a global gold standard, but rather to spark discussion on a rethinking of the global monetary system.

Zoellick says any future monetary system will include a number of reserve currencies, including the dollar, yen, euro, sterling and increasingly, the yuan. But many Chinese experts predict it will take some time to achieve that goal.

Editor:Xiong Qu |Source: CNTV.CN

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