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China calls for responsible global monetary policies

China on Monday made a fresh, thinly veiled criticism of the United States for running lax monetary and fiscal policies that risk undermining the dollar.

Countries whose currencies are held as reserves by global central banks are failing to take sufficient account of the global repercussions of their domestic policy stances, Assistant Finance Minister Zhu Guangyao told a financial forum.

“We call upon major reserve-issuing countries to take responsible monetary policies,” Zhu, who was speaking in English, said.

China holds an estimated two-thirds of its $2.27 trillion in foreign exchange reserves in dollar-denominated assets, and Premier Wen Jiabao urged the United States in March to safeguard the value of China's holdings.

Zhu, who did not mention the United States by name, was speaking on the first full day of US President Barack Obama's visit to China.

China's top banking regulator, Liu Mingkang, leveled unusually frank criticism at the Federal Reserve on Sunday, describing the US central bank's pledge to hold down borrowing costs and the weak dollar as a “new systemic risk.”

Zhu did not touch on the main US complaint about China's policy stance - its firm belief that the yuan is undervalued. (Reuters)