http://archives.econ.utah.edu/archives/a-list/2008w37/msg00074.htm
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<http://www.reuters.com/article/idUSPEK2402720080917> UPDATE 1-China paper urges new currency order after "tsunami" Wed Sep 17, 2008 2:30am EDT
(Updates with comments from Communist Party magazine in paragraphs 4 and 14-16)
By Chris Buckley
BEIJING, Sept 17 (Reuters) - Threatened by a "financial tsunami," the world must consider building a financial order no longer dependent on the United States, a leading Chinese state newspaper said on Wednesday.
The commentary in the overseas edition of the People's Daily said the collapse of Lehman Brothers Holdings Inc "may augur an even larger impending global 'financial tsunami'."
The People's Daily is the official newspaper of China's ruling Communist Party, and the overseas edition is a smaller circulation offshoot of the main paper.
Its pronouncements do not necessarily directly voice leadership views. But the commentary by a professor at Shanghai's Tongji University, as well as an essay in a Party journal, underscored official alarm at the turmoil in world financial markets.
China's central bank earlier this week cut its lending rate for the first time in six years, a move analysts said was aimed at bolstering the economy and the battered stock market.
"The eruption of the U.S. sub-prime crisis has exposed massive loopholes in the United States' financial oversight and supervision," writes the commentator, Shi Jianxun.
"The world urgently needs to create a diversified currency and financial system and fair and just financial order that is not dependent on the United States."
But Vice Premier Wang Qishan, on a visit to the United States, told U.S. trade officials in a meeting on Tuesday that China and the United States needed to maintain close economic ties with global markets going through such turbulence.
"The Chinese government is well aware of the fact that the United States, which is the world's largest developed country, and China, which is the world's largest developing country, should have constructive and cooperative economic and trade relations," he said.
China is a major buyer of U.S. Treasury bonds, and through its sovereign wealth fund it has taken stakes in two large U.S. financial institutions.
In July 2005, China revalued the yuan and freed it from a dollar peg to float within managed bands. But the yuan and China's trade remains tightly linked to the fortunes of the dollar.
The commentary suggested China must brace for grave economic fallout and look to alternatives, saying the crisis brings to mind the Great Depression of the 1930s.
"Lehman Brothers announced bankruptcy will not only have a domino effect on the global financial world, it will bring a shock to the world economy," the front-page comment stated.
In the Chinese Communist Party's chief ideological magazine, Seeking Truth, a deputy governor of the Agricultural Bank of China, Luo Xi, warned that the U.S. crisis and consequent slump will have a "serious impact on our country's export sector."
In this week's issue of the magazine, Luo said China must beware of the loose currency policies, poor regulation and reckless credit he blamed for America's crisis.
With China also worried about excessive real estate investment and speculation, the U.S. troubles "serve as a particular warning for our country's macro-economic policies and micro investment decisions," Luo wrote. (Reporting by Chris Buckley; Editing by Ken Wills)
<http://www.itar-tass.com/eng/level2.html?NewsID=13094201&PageNum=0> Putin calls for changing the architecture of the international financial system
20.09.2008, 17.56
SOCHI, September 20 (Itar-Tass) -- Prime Minister Vladimir Putin called for changing the architecture of the international financial system.
"We all need to think about changing the architecture of international finances and diversifying risks. The whole world economy cannot depend on one money-printing machine," Putin said at the final press conference after a meeting of the Russian-French bilateral commission on cooperation in Sochi on Saturday.
"This is a very serious issue that should be addressed in a calm, attentive and working manner without haste together with our colleagues from Europe and America," Putin said. "This issue should be considered not in a confrontation-like way but very benevolently in order to find the most acceptable ways for the development of the world economy and world finances."
French Prime Minister Francois Fillon said he would put forth several initiatives within days for dealing with the world financial crisis.
He said it was not possible yet to say whether France or Europe has survived the financial crisis. He believes it necessary to strengthen control and bring more transparency into cooperation between fiscal authorities of different countries.
"We will be working on this together in the next couple of weeks," he said.
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