China Has No Intention of Dumping Dollar: Minister

[rockymountaindem]

Source: Reuters via CNBC

"China, the world's largest holder of official foreign exchange reserves, has no intention of abandoning the U.S. dollar, Vice Foreign Minister He Yafei said on Tuesday.

He was speaking at a news briefing on President Hu Jintao's forthcoming trip to Russia, where he will attend an inaugural summit of the BRIC countries -- Brazil, Russia, India and China -- in Yekaterinburg on June 16.

Russian President Dmitry Medvedev and others have said the meeting would discuss the search for alternatives to the dollar as the world's principal reserve currency.

But, asked about the issue, He said: "Nobody is talking about dumping the dollar. I don't think this is realistic."



Read more: http://www.cnbc.com/id/31182448

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I guess they're not interested in mutual economic destruction.

[Uben]

1. They are heavily invested in the dollar

They would be the last ones to want to see the dollar collapse. It's the currency of choice in the world, so if it goes down, most of the others would too. This may be bad news for the doom and gloomers, but we will rebound from this recession. History shows every recession is followed by a period of boom. It's a never-ending cycle. People make money, they spend it. It's worked pretty darned well for a long time, and I see no end in our lifetime!

[Speck Tater]

2. When people at the top start publicly denying they are going to do something...

... that usually means that's exactly what they are planning to do.

[earthside]

3. Exactly.

The more I hear Chinese officials talk publicly about their support for the dollar, the surer I am that they are slowly but certainly moving to divest themselves. Of course, they don't want a collapse ... that's why they say these things, but our debt load, public and private, is killing us and the Chinese and everybody else in the long run will do what they have to to protect themselves.

[JonQ]

4. We do seem rather tied together

China should no more wish to see us fail than we would to see them fail (although there would be more than a bit of Schadenfreude from my end), it'd be mutually disastrous.