Julia Coronado: Chinese President Hu Jintao in Washington
Beijing, CHINA: A US and a Chinese flag wave outside a commercial building in Beijing, 09 July 2007. US Secretary of State Condoleezza Rice 06 July 2007 accused China of flouting the rules of global trade in its headlong economic expansion as the US administration 'has not been hesitant' to deploy trade tools against China, including a complaint lodged with the World Trade Organization over copyright piracy.
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STEVE CHIOTAKIS: China's president Hu Jintao meets with President Obama in Washington this week. The two men have lots to discuss. China doesn't like U.S. monetary policy of buying up bonds, which lowers long term interest rates here. The U.S. has complained about China's artificial undervaluing of its currency, the Yuan. Hu tells the Wall Street Journal he'd like to see the Yuan become a global currency, telling the Journal, the dollar-dominated reserve currency is "a thing of the past."
Julia Coronado is chief economist at the investment bank BNP Paribas. She's with us live from New York. Good morning Julia.
JULIA CORONADO: Good morning.
CHIOTAKIS: How important are Hu's remarks?
CORONADO: I think they're important for a couple of reasons. One he is taking a diplomatic tone so there's a desire for diplomacy and cooperation with the U.S. but they do strike in increasingly confident tone that we're seeing among Chinese policy makers. They really want to be setting the global agenda.
CHIOTAKIS: Well they certainly need confidence to move forward. What is China's long term monetary strategy, Julia.
CORONADO: It's a big question mark. China is facing a conflict. On the one hand they do want to play a bigger role in the global economy. On the other hand they want to maintain absolute control and peg their currency to the dollar. But being an international currency by definition means giving up some control. So, I think it's far from clear that this is going to be a successful experiment.
CHIOTAKIS: Julia Coronado, chief economist at the investment bank BNP Paribas joining us from New York. Julia, thank you.
CORONADO: My pleasure.