China airs FX view but no big stir at G8 summit

By Brian Love - Analysis

ROME (Reuters) - China may have told world leaders it wants a better, more stable global reserve currency system, but analysts say Beijing is in no rush to dethrone the dollar because it has vast dollar-denominated assets.

The issue, aired during meetings of the G8 industrial powers and big emerging economies in L'Aquila, Italy, got no mention in official statements and leaders had no real discussion about it, according to Britain's Gordon Brown and several officials.

French President Nicolas Sarkozy took the chance, however, to say something that, on the face of it, looks broadly similar to China's line -- that the world economic order has changed and the monetary system should do likewise after decades where the dollar was sole point of reference internationally.

He has called in the past for fairer exchange rates, notably when European aircraft maker Airbus said euro strength is causing it serious problems. But little has ever come of it.

At L'Aquila there was little appetite for a debate many see more as evolution than revolution, a slow shift toward a system of other currencies sharing pride of place with the dollar.

"It is an old idea and always an interesting discussion," IMF chief Dominique Strauss-Kahn told Reuters.

The dollar lost a cent at one stage last week when Reuters reported that China wanted this debated in L'Aquila. But it did not react when a Chinese official aired Beijing's position.

State Councillor Dai Bingguo told the summit in Italy: "We should have a better system for reserve currency issuance and regulation, so that we can maintain relative stability of major reserve currencies' exchange rates and promote a diversified and rational international reserve currency system."