China suggests multinational sovereign fund

BEIJING – A deputy governor of China’s central bank proposed the creation of a multinational sovereign wealth fund to help developing countries in a report released ahead of this week’s Group of 20 summit.

‘Considerations can be (given) to setting up a ‘supra-sovereign wealth investment fund’ to help channel capital inflow into developing world so that these countries can serve as new engines in global recovery,’ said the official, Hu Xiaolian, in a paper on the G-20’s Web site.The paper gave no details of how such a fund might work. But Beijing has called repeatedly for a more diverse global financial structure, with a greater voice for developing countries, and a new global currency to reduce reliance on the dominant US dollar.G-20 leaders, including Chinese President Hu Jintao and his American counterpart, Barack Obama, are meeting this week in Pittsburgh to discuss global economic recovery efforts and possible reforms to reduce future financial risks.Hu Xiaolian’s paper was delivered at a meeting of G-20 finance officials May 24-26 in Mumbai, India, according to the G-20 Web site.It repeated China’s complaints that the global crisis was caused by over reliance on the dollar and called for increasing the role of the International Monetary Fund’s quasi-currency, Special Drawing Rights, which Beijing has proposed as a possible new global currency.’The causes of the crisis are closely linked to the flawed international monetary system dominated by the US dollar,’ it said. – Nampa-AP