MercoPress. South Atlantic News Agency
China says emerging economies suffering from major capital inflows caused by US monetary policy
Governor Zhou Xiaochuan: Fed also has a responsibility towards the global economy China’s central bank Governor Zhou Xiaochuan said the US Federal Reserve must consider responsibility of the global effects of its actions as emerging-market economies suffer from capital inflows.
Because the US dollar is the world’s main reserve currency, the Fed “may have more responsibility not only in addressing the US economy but also the global economy,” Zhou said during a panel discussion at the Boao Forum for Asia on the southern Chinese island of Hainan.
Zhou’s comments repeat criticism of US monetary policy from emerging nations that have complained about the so-called quantitative easing which is funnelling unwanted cash into their economies, adding to inflation risks.
Fed Chairman Ben S. Bernanke last week did not discard further stimulus for the US economy even after upgrading the country’s economic outlook on March 13.
For China and some other emerging economies, the policy goal is to “gradually bring inflation down” to help achieve a so-called soft landing, and China is using interest rates combined with additional tools to achieve that, Zhou said. He declined to comment when asked if the central bank is planning any adjustments to monetary policy.
Expanding domestic demand and reducing the trade surplus have also been part of China’s strategic plan since the global financial crisis, Zhou pointed out.
China’s Premier Wen Jiabao has pledged to “fine-tune” economic policies as needed, faced with weakness in export demand and a cooling housing market. The economy is estimated to have grown at the slowest pace in almost three years in the first quarter of 2012.
Brazilian President Dilma Rousseff has also slammed rich nations for unleashing what she describes as a “tsunami” of cheap money that was “cannibalizing” poorer countries and forcing them to act to protect struggling local industries.
Without naming specific countries, Rousseff said these measures have damaged emerging-market nations such as Brazil by unleashing a wave of capital inflows. That has made their currencies overvalued and their exports more expensive.
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Read all commentsand then we have to read how the US and the UK run to over to cry to the WTO about developing countries being protectionist.
Apr 04th, 2012 - 04:24 am 0someone tell these people that the days they could do whatever they wanted and see the rest of the world submit to their actions and comply with their lectures is ending.
oh wait! Argentina already has!
the day when the dollar is no longer the world currency and a few rich countries have their way at every single international organization they've tailored to promote their agenda is fast coming.
@1 But until then you'll just have to keep listening to the lectures and watching as the Anglo agenda advances. It reminds me of ten years ago when a colleague of mine working in the UN in Sierra Leone had a number of tee-shirts produced and handed to local people (starting, I recall, with our three houseboys). On the front it said “UNAMSIL” and the UN badge. On the back it said “Working to the British Agenda”. Of course he was told off by our UN (British) boss not because it was not true but because it helps to do these thing quietly. So you are very clever to have noticed. I wonder, does being right help to ease your frustration and sense of inadequacy?
Apr 04th, 2012 - 06:28 am 0In other words: China, with its huge US dollar reserves, thinks it is the USA's responsibility to manage to US dollar to China's Advantage.
Apr 04th, 2012 - 07:18 am 0These guys are almost as cretinous as the Argentine government and their constant need to blame anyone but themselves for their own crass incompetence.
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