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China prefers to do things cautiously. As it aims to boost the role of Hong Kong as its financial window to the world, it will issue the sovereign bonds denominated in yuan in that market. Recently, China and the IMF also agreed to use the yuan rather than foreign currency to buy the Special Drawing Rights (the IMF's currency unit). This suggested that the renminbi is now widely accepted.

"Allowing Hong Kong residents to buy sovereign bonds offshore would increase the attractiveness of the RMB as an investment currency, broadening the sources of funding for Chinese governments," said a Citibank report.

 "Also, issuing RMB bonds offshore could affect onshore liquidity and would likely help equalise the cost of capital between mainland China and Hong Kong. Given that details of tenor and yields of the Ministry of Finance's renminbi bond issuance have yet to be announced, near term market impact will only be on an overall sentiment lift about HK's financial future."

 China, India, Brazil and Russia have been raising concerns. They would like a new reserve currency to replace the wobbling US dollar. The US, the G-20 and the International Monetary Fund have been largely mute on this issue. Any move to scrap the US dollar as the reserve would be a seismic change in the global financial landscape.

But going forward, it will be very difficult for the US dollar to maintain its dominant role. Debt and overspending in the US are increasing. Unemployment is rising. One of out of nine Americans depends on food stamps for survival. The Federal Reserve has pumped more than $2 trillion into the insolvent financial system to keep it afloat. The US budget deficit of $1.8 trillion is not sustainable. This is not to mention other contingent liabilities such as healthcare and social security.

The US strategy now is to salvage the stock market, because the stock market, to which all the wealth is tied, has become the US economy. Only the big banks will get the bailout. The smaller ones will be allowed to go under. So far this year, some 89 regional banks have been taken over by the federal authorities. Many more will have to go bankrupt.

The G-20 meeting of the finance ministers, in London over the weekend, did nothing to address the big issues. How should we deal with the banking crisis? What is the future of the US dollar's stability? Most important, how can we save this planet from excess consumption and global warming.

Instead, the G-20 meeting ended with an about-face statement. The bonuses of bankers will be somewhat curbed, yet no ceiling will be forced upon them. But their members will continue to expand the fiscal and monetary policy to revive global economic growth, which is expected by the IMF to fall by half a per cent this year.

All in all, the G-20, which dominates global capitalism, agreed to plunge ahead on this course of overproduction and over-consumption. They did not recognise that overproduction and over-consumption are the causes of the current malaise.

The world needs a new economic model that is more balanced and works in harmony with the environment. The era of unfettered industrial production and consumption is over. But the G-20 still acts as if we can continue the old mode of excess production and consumption.

The role of China is becoming more visible. Its top officials have come out to warn about the US dollar's stability because the Fed keeps on printing money to buy US treasuries and help out the big banks and corporations. So China is now diversifying its wealth into other assets, particularly gold, oil and other natural resources.

Eisuke Sakakibara, the former vice minister at Japan's Ministry of Finance, still expresses his upbeat view on the US dollar. He said the US dollar would continue to be the reserve currency over the next 20 years. He also called on Japan to spend more than $105 billion to stimulate economic growth. With the growing burden of government spending, Japan's public debt could rise to 195 per cent of GDP next year.

There is no consensus as to how to save the world from the threat of economic recession, except for the old prescription of government stimulus and loose monetary policy. The growth rate must continue to be achieved. But aren't we already at the end of that era of excess?