China says key currency countries need watching

By Kirby Chien and Eadie Chen

BOAO, China (Reuters) - Chinese Premier Wen Jiabao said on Saturday that the economic polices of countries which issue global reserve currencies require closer supervision as part of building a diversified international monetary system.

Wen and central bank governor Zhou Xiaochuan also cautioned against jumping to the conclusion that China is already on the path to economic recovery, after data issued on Thursday showed signs of an upturn in momentum.

Wen's currency comments, an apparent reference to U.S. economic management that Beijing has blamed in part for the global financial crisis, were twinned with a pledge to promote more international use of the Chinese yuan .

Wen did not mention the United States by name but he has expressed concern in recent months about the safety of Chinese investments in U.S. dollar assets.

"We should strengthen the supervision of the economic policies of the main reserve currency economies and push forward the establishment of a diversified international monetary system," he said in his opening address to the Boao Forum for Asia, held annually in the Chinese island province of Hainan.

It was the second time this month that China has made such an appeal, following President Hu Jintao's call at the London G20 summit earlier this month for the International Monetary Fund to strengthen its oversight of reserve currency-issuing economies.

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