Chinese President Hu Jintao will meet U.S. President Barack Obama in Washington this week for a summit. The two leaders are expected to discuss a wide range of issues including global trade and currency valuations.
In a rare written interview with two U.S. newspapers released on Sunday, Hu called for an end to the zero sum Cold War behavior and suggested new cooperation with the United States.
Below are some of Hu's key quotes:
We both stand to gain from a sound China-U.S. relationship, and lose from confrontation.
... We should abandon the zero-sum Cold War mentality, view each other's development in an objective and sensible way, respect each other's choice of development path, and pursue common development through win-win cooperation.
The current international currency system is the product of the past. As a major reserve currency, the U.S. dollar is used in considerable amount of global trade in commodities as well as in most of the investment and financial transactions. The monetary policy of the United States has a major impact on global liquidity and capital flows and therefore, the liquidity of the U.S. dollar should be kept at a reasonable and stable level.
It takes a long time for a country's currency to be widely accepted in the world. China has made important contribution to the world economy in terms of total economic output and trade, and the RMB has played a role in the world economic development. But making the RMB an international currency will be a fairly long process.
China has adopted a package plan to curb inflation, including interest rate adjustment. We have adopted a managed floating exchange rate regime based on market supply and demand with reference to a basket of currencies. Changes in exchange rate are a result of multiple factors, including the balance of international payment and market supply and demand. In this sense, inflation can hardly be the main factor in determining the exchange rate policy.
There was high tension on the Korean peninsula a few weeks ago. China maintained close contact and coordination with other parties and made relentless efforts to help ease the tension and maintain peace and stability on the peninsula.
... Thanks to joint efforts by China and other parties, there have been signs of relaxation. We hope that the relevant parties will seize the opportunity to engage in active interactions, resume the process of dialogue and consultation as soon as possible, and ensure that the situation on the peninsula will move forward in a positive direction.
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