China's Talk of New Global Reserve Currency is just that - Talk

China is very slowly transitioning into a domestic demand led economy from an export led economy. That means that over time, their accumulated US Dollars will be used to finance an import boom to feed the appetite of a growing Chinese middle class and for Chinese investment in its productive capacity. But, China is understandably concerned that its huge stock-pile of dollars will be worth less in the coming years due to the unprecedented oversupply being created by the Fed. China's answer is to use the dollars to purchase large stores of physical assets, such as oil and base metals and to purchase foreign suppliers of commodities. China's public admonition to the US to assure it of its commitment to reducing debt and to raise the issue of an alternative global reserve currency is just talk. China needs the value of the dollar to remain in tact over the next several years to maximize its purchases of hard commodities. So China won't diversify from Dollars to Euros or IMF special drawing rights or any other currency. They instead will hold their wealth in goods.