A renowned US-based Indian economist has predicted that Chinese currency renminbi will eclipse dollar in international trading systems within 10 to 15 years.
Dr. Arvind Subramanian, who has been named by Foreign Policy magazine as one of the world's top 100 global thinkers in 2011, made this prediction while delivering a talk on "US-China Partnership and Global Economic Order: Implications for India" at Observer Research Foundation in Delhi today.
Dr. Subramanian, Dennis Weatherstone Senior Fellow, Peterson Institute for International Economics (PIIE) and Senior Fellow, Center for Global Development, said with Europe becoming a debtor now, US and European Union should cede their power to China in the International Monetary Fund and World Bank.
He said US should be willing to give power to China in multi-lateral institutions, in return for a stake for China.
Criticising China's move for a BRICS bank, Dr. Subramanian suggested that China should instead strengthen the world monetary institutions like the IMF and the World Bank.
He said for India too, it is better to strengthen the IMF and WB instead of going along with the idea of creating the BRICS bank where it may have to face the hegemony of China.
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Dr Subramanian said with China playing ball with big powers, India is getting isolated and marginalized in WTO in Geneva.
He suggested that India should have a free trade agreement with the US also, which will help both the countries.
Dr Subramanian, who had earlier served IMF and GATT, said he was against any move to contain China. He instead favoured multilateral open architectures.
Chairing the event, Dr. Sanjaya Baru, Director for Geo-Economics and Strategy, International Institute for Strategic Studies, said he along with Dr. C. Raja Mohan, when they were members of the National Security Advisory Board, had tried to impress on other members that the key to power in the 21st century lies in the economic capability of nations, but they were reluctant to agree to this argument.
