This is complicated and I am not sure the Financial Times totally explained it in a way that reflected exactly what some in the Chinese Government would like the world to consider.

Mr Zhou said the proposal would require “extraordinary political vision and courage” and acknowledged a debt to John Maynard Keynes, who made a similar suggestion in the 1940s.

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To replace the current system, Mr Zhou suggested expanding the role of special drawing rights, which were introduced by the IMF in 1969 to support the Bretton Woods fixed exchange rate regime but became less relevant once that collapsed in the 1970s.

Today, the value of SDRs is based on a basket of four currencies – the US dollar, yen, euro and sterling – and they are used largely as a unit of account by the IMF and some other international organisations.

China’s proposal would expand the basket of currencies forming the basis of SDR valuation to all major economies and set up a settlement system between SDRs and other currencies so they could be used in international trade and financial transactions.

Countries would entrust a portion of their SDR reserves to the IMF to manage collectively on their behalf and SDRs would gradually replace existing reserve currencies.

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All that said, I think one of the main things that is troubling Chinese Intellectuals is credit based currencies.
The amount of IOU's they are holding, and the potential collapse in the value of those IOU's, has got to be troubling to them.

China should not have been using those IOU's to purchase treasuries, which was in effect China using IOU's to purchase more IOU's. It served their economic agenda at the time. They did not want to stimulate competition in the United States which would have happened if they had used those IOU's to buy real products. So now they have all those IOU's and the ability of the United States to produce future wealth for which those IOU's might have value has become in question as the remainder of our Industrial Sector seems to be collapsing.

China would be wise to use their trade surplus to help American Manufaturers of real wealth, products, and to move toward a sytem to create a true balance of trade between the United States and China and so the trade involves real value, and not worthless currency.

Contrary to all the gloom and doom, though there is no doubt that D.C. has done serious damage to our Industrial Sector through incompetent policies, we are still the largest producer of wealth in the world. China's IOU's from America are hardly worthless. But if they don't start spending those IOU's to buy real products from the United States to grease the wheels of our industrial sector, how much longer they will have value is a question mark.

Creating smoking mirrors to continue the massive trade imbalance and having their people work to make products they can't afford to buy is not the way to move China or the world forward.

I also have trouble with credit based currencies. To try to stimulate an economy by promoting debt rather than production is insane. To try to forget that at the root of every economy is the barter of real products and service is beyond foolish.

Much of the current budget, as I understand it, will do little to create real wealth behind the currency being added to the economy. This is not good and I do share China's concern.