'China is taking a leap forward to control world currency'
China is vowing to make more reforms, among them cutting red tape and establishing the yuan as a world currency. The 7th Annual Meeting of the New Champions is opening in the Chinese city of Dalian, the gathering has become known as a 'summer Davos'. RT has talked to Dr. Pattberg about China’s prospects for introducing a new world currency.
RT:Do you think when China says it wants to make the yuan a global alternative to the dollar, is there any possibility of that happening at some point?
Thorsten Pattberg: Yes, it's perfectly reasonable to think that the Chinese want to see their currency become the next world currency, there's a plan. And of course China at the moment is purchasing more and more gold, this also plays into this. We heard they recently purchased several hundred tons of gold through Hong Kong, the trading hub. And of course if you hoard gold like a dragon, this is a lot about prestige. The mere presence of gold in your country gives rise to even more self-confidence and to this bling-bling sensation that China is really up to something. The mere intention to buy more gold in the future will certainly have an impact on the rise of gold prices in the world. So China is taking a leap forward to control the world currency and to replace it with yuan.
RT:The current Chinese leadership seems almost obsessed with reforms. Why? Isn't China in good enough shape as it is?
TP: It is still growing by 7.5%, it's enough for the current leadership. And of course China naturally is a reform-based society that announces reforms regularly. The new government is pursuing a range of new reforms, tax reforms basically. They want to transform the investment economy into an economy that is more focused on domestic consumption.
RT:With increasing wealth comes enormous changes in society, in national identity, can China itself keep up with its own economic growth?
TP: I believe that it will keep it up for the next 10 years at least. But there are a lot of things to do. The economy growth is actually faster than a lot of other things in China like the political maturity. Social problems are still looming in China. And one of the topics at the global forum is the work ethic. China wants to have a stakehold and make the rules of the game and shape them in the future, and it has to come to the table and discuss with Europeans and Americans how we deal together in the future. Not only on economic issues, but on political ones, on ecological ones, social and cultural ones. China has to catch up in all those fields quickly.