In advance of President Hu’s visit to Washington this week, he answered question submitted by the WSJ and Washington Post.
Here’s part of what he had to say on currencies:
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.
Oh, and we will put the Yuan anywhere we want it… And intervene to the extent necessary to make it that way… and buy bonds with the proceeds, even if that forces your yield curve to stand on its head and fuels a housing bubble. Oh, and your financial regulation stinks, because it can’t handle massive global imbalances created by my economic policies.