The global financial crisis has tarnished the dollar and will prompt reserve managers to diversify, but the U.S. currency will retain its dominant international role, a senior Chinese official said in remarks published on Wednesday, Reuters reported. Guan Tao from the State Administration of Foreign Exchange, which invests China's $1.95 trillion in currency reserves, likened the risk of U.S. inflation and dollar depreciation to "blocked dams" that threatened the stability of the global monetary system in the medium term.

Credit-ratings firm Fitch Ratings says China's banks are showing early signs of asset-quality deterioration amid a torrent of lending to help fund government stimulus projects, The Wall Street Journal reported. New loans totaling 5.17 trillion yuan, or $757.5 billion, in the first four months of this year have already exceeded the 4.91 trillion yuan in loans made in all of 2008. Amid the credit surge, government officials have warned of rising risks.

Taiwan's economy contracted by a record 10.24% in the first quarter from a year earlier as Western consumers refrained from buying the island's exports, prompting the government to revise down its growth forecast for 2009, The Wall Street Journal reported. The first-quarter decline in gross domestic product--the third consecutive quarterly retreat for the export-oriented economy--exceeded the 9.05% fall expected and followed the island's revised 8.61% contraction in the fourth quarter of 2008. Taiwan, home to technology-goods producers like Acer Inc.

Chinese exports fell steeply in April for the sixth month in succession, suggesting the worst might not be over for the world’s third largest economy, the Financial Times reported. The total value of Chinese exports fell 22.6 per cent to $91.9 billion last month compared with the same month a year earlier--a faster rate of decline than the 17.1 per cent year-on-year drop in March. Imports fell 23 per cent from a year earlier to $78.8 billion in what some analysts said was a sign that domestic investors remained unwilling to invest in new capacity.

Bank of America Corp., seeking to bolster its financial standing in the face of new government requirements, raised $7.3 billion from Asian investors Tuesday through the sale of a roughly 5.7% stake in China Construction Bank Corp., according to people familiar with the matter, The Wall Street Journal reported. For the U.S. lender, the move marks a significant step to raising $34 billion in capital needed to meet the requirements of a new U.S. government stress test for lenders.

Chrysler LLC's global operations, including those in China, won't be affected by the company's bankruptcy proceedings in the U.S., the auto maker said in a statement Monday, Dow Jones Newswires reported. "Chrysler's international businesses, including the Asia-Pacific region and China, are not included in the scope of the bankruptcy protection petition," the company said in a letter to customers published in the Economic Observer. "Daily operations won't be impacted." Chrysler will continue to pay suppliers here and honor service warranties, the statement said.

Australian political opposition to a proposed US$19.5 billion investment by Aluminum Corp. of China Ltd. in Anglo-Australian mining giant Rio Tinto Ltd. was raised to a new level Saturday as two prominent members of the upper legislative house launched a joint advertising campaign calling for the ruling Labor government to block the deal, The Wall Street Journal reported. The move will have little influence on whether the proposed tie-up gets approval from the Australian government, because that decision lies solely with Treasurer Wayne Swan.

OZ Minerals has recommended its shareholders vote in favour of its deal with China Minmetals to save it from administration, The Australian reported. Releasing documents today that outline the $US1.2 billion ($1.6 billion) asset sale, OZ chairman Barry Cusack said if the transaction were not approved, OZ Minerals might not be successful in refinancing its debt, which could potentially lead to it being unable to continue operating as a going concern and being placed into voluntary administration or receivership.

The International Monetary Fund said most Asian economies are facing a weak recovery next year from a sharp contraction this year and should boost spending to help offset struggling global export demand, The Associated Press reported. Asia's collective economic growth will likely slow to 1.3 percent this year from 5.1 percent last year, before expanding 4.3 percent in 2010, the IMF said in a report. Excluding China and India, Asian economies will contract 2.9 percent this year and grow 1.6 percent next year, the fund predicted.

Diluting Chinese savings to bail out America’s failing banks and bankrupt households, though highly beneficial to the US national interest in the short term, will destroy the dollar’s global status, the Financial Times reported. America’s policy is pushing China towards developing an alternative financial system. For the past two decades China’s entry into the global economy rested on making cheap labour available to multi-nationals and pegging the renminbi to the dollar.