Published On: Sun, Mar 3rd, 2013

Central Bank of China Dep.Governor Yi Gang; Calls to avoid Currency War but China is prepared

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Central Bank of China Dep. Governor Yi Gang. Calls to avoid currency war but prepared to meet one. Photo, Remy Steinegger

Central Bank of China Dep. Governor Yi Gang. Calls to avoid currency war but prepared to meet one. Photo, Remy Steinegger

Christof Lehmann (nsnbc).- In statements to international media on Saturday, the deputy governor of the Central Bank of China, Yi Gang, has called on international players to avoid a currency war, but stated, that China is fully prepared to face a currency war if necessary.

According to the Chinese news agency Xinhua, the deputy governor said, that major world economies should lower their units to advance trade through a looser monetary policy.

China is fully prepared in terms of monetary policies and other mechanisms, to deal with a possible currency war, and China will take full account of the quantitative easing policy conducted by the central banks of some countries“, Yi Gan said.

Xinhua news agency reports, that a currency war can be avoided, if those policies, which the most powerful countries have reached a consensus about at the recent G20 meetings, according to which monetary policy should primarily be used as a tool for regulating domestic economies are being adhered to by the worlds major economic powers. Yi Gang said, that some of the most powerful economic nations fear, that by removing stimuli, their economies would fall into another recession.

Xinhua referred to Japan´s devaluation of the Japanese Yen by 20 per cent against the US-Dollar since Prime Minister Shinzo Abe took office, and the impact of this policy on inflation, as an example.

There is no doubt that China would be prepared to face a currency war if it has to. The Chinese economy is solid and continues growing, although at a slower rate and guided by more prudence that only a few years ago. China is actively bolstering its gold reserves and is, also in many other regards, the least vulnerable of the worlds major economies. China is however, also the worlds greatest owner of US treasury bonds and US Dollar outside the USA and it is not interest in waging a currency war that would diminish the value of that major investment.

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About the Author

- Dr. Christof Lehmann is the founder and editor of nsnbc. He is a psychologist and former independent political consultant on conflict, conflict resolution and a wide range of other political issues. In March 2013 he established nsnbc as a daily, independent, international on-line newspaper. He can be contacted at nsnbc international at nsnbc.wordpress@gmail.com

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