OECD's Gurria suggests greater role for the yuan
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Although the Chinese government is yet to announce a roadmap for internationalization of the yuan, it has begun the process through currency swaps and by using the currency for foreign-trade settlements.
China got a shot in the arm recently when the US decided to support the inclusion of the yuan in the SDR, during President Hu Jintao's recent US visit.
French Finance Minister Christine Lagarde said France has highlighted five areas for action - the identification of macroeconomic imbalances, reform of the international monetary system, reducing the excessive price volatility of raw materials, establishing seamless financial regulation, and the promotion of development.
Finance ministers and central bank governors of the G20 countries are expected to hold three meetings this year ahead of the annual summit which will be held in Cannes during November.
The Paris meeting will be followed by one in Washington in April, and another in Paris during October.
Gurria said appreciation of the renminbi would definitely help to lower the overall Chinese current-account surplus but that it is impossible to address the trade imbalance between China and the US. He also said the appreciation of the Chinese currency would also help to contain rising domestic inflationary pressures.
However, China's economy depends on large imports of raw materials and as a result, it needs to have a surplus in manufactured goods to balance the deficit, according to Gurria. "Thus even with a current account in complete balance, China is likely to run a surplus with the major developed countries in purchasing its raw materials."
