China wants G8 to raise the question of a new reserve currency system

Vice Foreign Minister He Yafei said that China hopes for diversification of the international currency system in the future, and it would be "normal" for the issue to be raised for discussion at next week's Group of Eight summit in Italy.

According to G8 sources, Beijing had asked for a debate on proposals for a new global reserve currency at the G8 summit and the issue could be referred to briefly in the summit statement.

The news pushed down the dollar, which is particularly sensitive to comments from China because bankers estimate the country holds perhaps 70 percent of its $1.95 trillion in official currency reserves in the U.S. currency.

In response to a reporters` question about the matter Yafei said: "I have not heard that China has this request." Besides, he added that the financial crisis has fully exposed some shortcomings in the international currency system.

China's central bank said the dollar had worsened the crisis. In addition, last week the bank renewed its call for the creation of a super-sovereign reserve currency to reduce its global domination.

The People's Bank of China caused a stir with its suggestion, first made in March, that the International Monetary Fund's Special Drawing Right could eventually displace the dollar as the principal reserve currency.