Scepticism about US financial policy is widespread in China. With its $2,270bn in foreign currency reserves, an estimated 70 per cent of which are in US dollar assets, Beijing's pride in its own relative ascendancy against the US over the past year is mixed with fear that Washington will seek to inflate away its massive debt. Indeed the audience at a Beijing university talk by Tim Geithner laughed out loud when the US Treasury secretary said China's huge investment in US bonds was safe.

Even the country's leaders have stepped in. Premier Wen Jiabao said in March: “I request the US to maintain its good credit, to honour its promises and to guarantee the safety of China's assets.”

Yet in recent months, as the depreciation in the dollar has gathered pace, there has been less public discussion about the issue by Chinese leaders. In part, Beijing realises its comments could hasten the dollar's decline. Moreover, a measured fall has served its short- term interests. Given the renminbi has in effect been re-pegged to the dollar since the middle of 2008, the struggling export sector has found some relief as the Chinese currency has followed the dollar down against its other trading partners.

So far, too, China's bark has been worse than its bite. Monthly data on Treasury bond purchases seem to indicate Beijing remains a major buyer of US bonds. The debate has shifted to a more long-term one about the future role of the dollar and the renminbi. Ahead of the April Group of 20 leading nations summit, Zhou Xiaochuan, central bank governor, proposed replacing the dollar as the global reserve currency with a basket of currencies managed by the International Monetary Fund. Beijing has since taken steps to boost the global role of its currency, including setting up a pilot programme for Chinese companies to settle trade orders in renminbi, and held talks with Russia and Brazil about settling bilateral trade in each others' currencies.

However, even within China there is a recognition that any changes in the status of the dollar are distant. “The market is too pessimistic on the dollar in my opinion. As long as the United States is still the most competitive and innovative economy, the US dollar will remain the most important currency and the global reserve currency,” says Guo Shuqing, chairman of China Construction Bank, one of the country's largest. “I would like the renminbi to be a hard currency like the dollar or euro, but this will take a long time.”

China needs to abandon currency controls and develop a large market-driven, domestic bond market, economists say, for the renminbi to play a global role.

Yet economic reformers now have an important card to play. In the past, their ideas were often criticised for being too western. By presenting relaxation of currency controls as a challenge to the dominance of the dollar, they are able to give their proposals a nationalist veneer.