History may show that China is the biggest victim of the post-Bretton Woods international monetary system, a system of the dollar standard. Under this system, everything hinges on the integrity of the American government and the Fed, or the speed of their printing press. The American government and the Fed have let down those who have trust in them.
For its own sake, China should stop further piling up greenbacks massively. To do so, the PBOC should reduce its intervention in the foreign exchange market. This means that the renminbi may appreciate, which in turn will cause some troubles for some exporting enterprises. However, with a more balanced economy, China should be able to achieve a sustained growth for another decade.
Yu Yongding is president of the China Society for World Economics. For the full version of his comment, go to www.chinadaily.com.cn.
(Source: China Daily)
