First, the $3.2 trillion in official reserves that China has accumulated in maintaining the yuan's semi-fixed peg to the dollar tie Beijing's policy hands. That is because any hostile gesture, such as a threat to shift out of dollars, would destroy Chinese wealth.
　　Second, because of the extensive private use of the dollar globally, the United States is better able to enforce a financial blockade, such as the one now directed against Iran.
　　"I have the impression that the additional national power which stems from commanding an international currency tends to be exaggerated by strategic thinkers," he wrote.
　　ASIAN STRAINS
　　Yuriko Koike, a former Japanese defense minister, sees the power of currencies through a different prism. She said China was already using its economic might to build a "new model mercantilist imperialism" in Africa.
　　Turning to Asia, Koike said China's rise was likely to continue to incite as many fears as it does hopes. Beijing's economic clout was one more reason for Japan to put its financial house in order soon.
　　"So far, Chinese purchases of Japanese government bonds have been negligible, but the potential for China to gain influence over Japan in this regard is real and should be acknowledged," Koike, who was not present to discuss her paper, wrote.
　　Not surprisingly, Zha, the Shanghai researcher, saw the blossoming of the yuan as the currency equivalent of China's peaceful rise in foreign policy.