China Proposes to Replace USD as Standard Currency

Ever since the economic recession, the U.S. dollar has dropped significantly in value. Although the economy is showing significant recovery, China still believes this damage could be permanent. For about a year now, the idea has been around to replace the USD with the Chinese Yen as the international standard currency, or to at least have them side by side. The response to this suggestion was mixed; some people felt that this would solve many economic difficulties, while others felt it was too much of a stretch for the Chinese. In my opinion, the recession of the USD is most likely to be temporary, at which point it can resume being the standard currency. In this case, China seems to be overly opportunistic in its approach and sort-of jumping-the-trigger. From another sense, China could be simply testing the waters for a significant political bonus. If that is the case, we can expect more of these suggestions for currency from China. Either way, I don't think the time is right for the Chinese currency to overtake the USD, simply because the USD is more widely known and trusted.

http://rawstory.com/2010/02/imf-chief-pushes-power-worlds-stage/

http://business.timesonline.co.uk/tol/business/economics/article5963370.ece

China and Iran

The other day, I heard a news cast about how Western countries are pushing to have China sever ties with Iran, a long time trade partner. Obviously, China adamantly refused, citing their long, long partnership with Iran due to both political and economical reasons. The two exchange many common goods, such as crude and "made in China" products, and have been doing so for hundreds of years. Despite the more modern concerns of terrorist activity in the region, China is unwilling to relinquish its friendship with Iran. This is probably due to the fact that China has just come out of seclusion and established itself as an economically powerful country, and doesn't want to make too many enemies too soon. As you will notice, China has very few international rivals, because as independent as they claim to have been in the past centuries, they depend very much on international consumers for their products. In conclusion, some other countries may criticize China for associating with suspicious countries, but Iran isn't an enemy of China, and China isn't eager to make it one.

http://en.wikipedia.org/wiki/People's_Republic_of_China_–_Iran_relations#Relations_today