BEIJING Oct 14 The United States fired the first
shot in the currency war and the rest of the world must be on
guard for its deliberate strategy to devalue the dollar, a
Chinese economist said in an official newspaper on Thursday.
In a front-page commentary in the overseas edition of the
People's Daily, Li Xiangyang described the United States as the
conflict's "first maker of tomb figures", a Chinese idiom that
means someone who creates a bad precedent.
Li, head of the Asia department at the Chinese Academy of
Social Sciences, a top government think tank, said continued
intervention in currency markets by developed economies would
deal a blow to global economic recovery.
Chinese leaders have warned before that loose monetary
policies in the United States pose a serious challenge for
emerging markets, but rarely in such strident language, a window
onto the rising anger in Beijing.
"The dollar's depreciation may appear to be market-driven. In
reality, it is a depreciation coloured by very strong, deliberate
actions," Li said in the paper, which serves as the chief
mouthpiece of China's ruling Communist Party.
The overseas edition of the People's Daily is a smaller
offshoot of the domestic edition.
Li said the Federal Reserve's announcement that it might soon
launch another round of quantitative easing by buying bonds and
other financial assets had been the key factor pulling down the
The motives were plain enough, he said.
Without a weaker dollar, the United States would have no hope
of meeting President Barack Obama's goal to double exports in
five years, Li said.
Dollar depreciation will also serve longer-term interests by
generating inflation and easing the debt burden that the
financial crisis dumped on the U.S. government.
"If the global financial crisis was about nationalising
private debt, then in the post-crisis period the urgent need of
the United States is to internationalise its national debt," he
(Reporting by Simon Rabinovitch; Editing by Chris Lewis)