US reluctant to surrender dollar's dominance
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Q: One important aspect of global monetary reform is the internationaliza-tion of the yuan. How do you view the process?
Xia: The internationalization of the yuan is a long process. There are three core ideas. First, we should try to put yuan into the global market, and then we create an offshore market where global holders could make deposits, loans and investments. And finally, make sure the Chinese government has a certain channel to let the yuan in the offshore market flow back to China.
Cao: The internationalization of the yen is worth considering. Japan has been the world's second largest economy for decades, but the yen's share as a world settlement currency and reserve currency is still minimal.
Q: How can the G20 better establish a more stable and sustainable global economic and financial architecture?
Snower: I would like to approach this subject from an unconventional angle. I think we all agree that the G20 is an extremely useful institution whose potential has not been fully realized.
But if we look at the disputes that appeared before the G20 meeting, then we find the disputes are zero-sum games. The disputes about currency and global imbalances were often reduced through national politics to zero-sum games.
The goal of the G20 at least should be to move away from zero-sum games toward a win-win situation. In order to do so, we need to identify the underlying causes of the current problem and the global imbalances, and try to address this in a way that makes it a common cause for different countries.
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