China Reduces Dependence on Dollar

[WhiskeyGirl]

Ba: Too large foreign exchange reserves make investing more difficult in the microcosm and lead to a loss to the national welfare in macrocosm. Strategically, China should encourage its residents and enterprises to have larger rights to use foreign exchange, and stop the government holding too much foreign exchange. While actively attracting foreign capital, China should also encourage investment in foreign countries. Meanwhile, RMB exchange rates should be sufficiently flexible. In terms of economic structure, China should expand its domestic demand and consumption and should no longer excessively depend on exports. Reforms in economic structure must be carried out to realize these goals.

    Guo: If China wants to have the initiative, it must do well in two ways. Firstly, it must expand domestic demand and decrease its trade surplus. Secondly, it must expand its export of capital and change its monetary assets into physical assets such as land, mines and enterprises. Then, China will be able to reduce its dependence on the U.S. dollar.

http://news.xinhuanet.com/english/2009-09/02/content_11981893.htm

How about a tax on raw material exports?