China, France preparing for monetary reform summit

By Fu Jing (China Daily)
Updated: 2011-01-28 11:10
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China, France preparing for monetary reform summit

Delegates at an International Monetary Fund-World Bank Group annual meeting in Washington. France aims to engage countries to push the reform of international financial institutions. [Photo /Bloomberg]

Countries' leaders are likely to attend the meeting aimed at reordering the financial system

DAVOS, Switzerland - France is trying to engage China in a push to reform the international monetary system and is preparing for a high-profile international seminar on the topic in China at the end of March.

Top leaders from China and France are likely to be present at the gathering, which aims to attract the world's "best minds" to discuss how to shape a new global monetary system, according to Yu Yongding, a senior economist with the Chinese Academy of Social Sciences (CASS) and former academic adviser to China's central bank.

The seminar will be a preface to the G20 summit, which will be held in France in the latter half of this year.

The French President, Nicolas Sarkozy, announced his planned presence at the seminar earlier this week and said he hoped that Chinese President Hu Jintao would also attend the meeting.

Official confirmation from the Chinese side was unavailable at the time of going to press, but the Chinese embassy in France ran the news of Sarkozy's announcement on its French-language website.

Yu told China Daily on Wednesday that Sarkozy has already invested much energy in pushing forward reform of the current global monetary architecture, which has been dominated by the industrialized countries, especially the United States.

"The system must be reformed and China could join hands with the emerging-market economies to push that process while continuing talks with the developed countries," Yi Xianrong, an economist at the CASS, said earlier.

Sarkozy has met the globe's - in his words - "best experts" recently, including Yu, for suggestions for the reform.

Sarkozy's possible visit and attendance at the seminar signaled that Beijing's relationship with Paris, and the European Union, will gather greater momentum following Vice-Premier Li Keqiang's recent visits to Spain, Germany and the United Kingdom.

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Sarkozy's planned trip to Beijing would happen just four months after Hu's visit to France. In November, Sarkozy himself received Hu at the airport, a rare diplomatic arrangement that emphasized France's renewed efforts to increase its ties with China, analysts said.

Two weeks ago, China's Vice-Foreign Minister, Cui Tiankai, flew to Paris to exchange views with French officials about their stance on monetary reform and coordination of preparations for the G20 summit.

Sarkozy's Beijing visit would be part of his marathon consultation with "heads of state, international organizations, international unions, and company executives" about the priorities for the French presidency of the G8 and G20 nations.

Echoing his announcements at the G20 Seoul summit, Sarkozy is still focused on reformation of the international monetary system, regulation of the primary goods market, and the identification of new ways to fund development.

French media said the monetary system reform aims to protect emerging countries from disinvestment, to help coordinate a balance between currencies, and to avoid protectionism.

He also wants to push forward the internationalization of China's currency, the yuan, and reduce the supremacy of the US dollar, analysts said.

In October 2008, Sarkozy indicated he would push for a "new" Bretton Woods agreement, a commitment he renewed in August 2010 when addressing French ambassadors. "The prosperous years after World War II were largely due to Bretton Woods' rules and institutions," Sarkozy was quoted by French media as saying. "Since the beginning of the 70s, we have been living in an international no-monetary system."

The Bretton Woods system set up rules for financial relations between the world's major industrial economies in the mid-20th century, the first example of a fully negotiated global monetary order.