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China won’t press for new global currency at G8

China will likely push for a bigger voice for developing countries at the G8 meeting this week, but a diplomat said it won't raise its proposal to replace the dollar as a global standard.
/ Source: The Associated Press

China will likely push for a bigger voice for developing countries in international monetary policy at the G8 meeting this week, but a top Chinese diplomat said it won't raise its proposal for a new global currency to replace the dollar.

China is not one of the Group of Eight major economies but is attending the meeting in the Italian city of L'Aquila as part of a group of five large developing countries. President Hu Jintao arrived Sunday in Italy.

Beijing called in March for the creation of a new currency, possibly based on the IMF's Special Drawing Rights, created in the 1960s and used as the monetary standard for dealings between the fund and member governments.

"This international financial crisis has fully exposed the weaknesses and loopholes in the international monetary system," a deputy Chinese foreign minister, He Yafei, said at a briefing last week. "If this issue is raised by leaders during the meeting, it is natural, because we are all discussing how to respond to the international financial crisis and promote recovery."

He said Chinese officials have no plans to raise the issue but will discuss it if others raise it.

Hu is expected to press for a bigger role for China and other developing countries in global finance.

China won a pledge of more influence for developing countries in the International Monetary Fund last November at a summit on the global crisis. But the United States and other governments have yet to commit to specific changes.

Any world financial structure "must be broadly based, having both developing and developed countries as members," He said.

The G8 is made up of the United States, Germany, Japan, Britain, Italy, France, Canada and Russia.

China is also set to join the United States and other governments at a gathering of 19 nations held during the G8 meeting to discuss climate and energy.

China has criticized a U.S. bill to impose tariffs on imports from countries that fail to cut emissions of gases blamed for global warming.

"We are firmly against such attempts to advance trade protectionism under the pretext of climate change," He said.