The global financial crisis has clouded the world economy for more than a year. In the United States, the hardest hit by the financial crisis, 140 banks went bankrupt this year alone and the unstable U.S. economy has led to a weakened greenback. Zhu Min, Vice Governor of the People's Bank of China, believes the dollar will continue to depreciate in 2010. He shared this opinion at the Third Asia-Pacific Forum on Economics and Finances held in Beijing in December. Edited excerpts follow:

The dollar depreciation cycle has not ended yet and will almost certainly continue in 2010.

At present, the debt-laden United States holds a staggering $3 trillion in debts to other countries. There are only three ways to resolve the problem: tax hikes, issuing more Treasury bonds and printing more greenbacks.

Tax hikes would be impossible since the American people have already suffered considerably from the ongoing crisis. It is also less likely for the United States to sell more Treasury bonds to other countries because they already hold too many dollar-denominated debts. The third possibility—printing more money, which only the U.S. Government is privileged to do—seems to be the best choice.

In the long run, the U.S. Government might resort to a combination of selling bonds and printing dollars, which will eventually lead to a depreciation of the American currency.

The United States intends to pull its economy out of the current financial quagmire by exporting more products and has adopted quite a few measures to promote its goods. A weakened U.S. dollar makes the made-in-America goods inexpensive and more competitive in the international market.

The dollar has lost 26-27 percent of its value since the beginning of 2009. At the outset of the credit crunch, countries across the world, out of concern for their own financial security, bought a considerable amount of dollar assets, being unable to find safer monetary options. The robust demand once pushed the dollar value up 13 percent, but most recently the dollar has experienced a 13-percent decrease in value. The major fluctuations prove that the dollar depreciation cycle is far from over.

The bearish dollar is due largely to the equally bearish American economy. Asian economies, especially China, are currently replacing the United States as the major driving force for global economic growth and will continue to lead global recovery efforts for at least a few years. Even though recovery signs are beginning to show in the United States, the increasing unemployment rate still blocks any rays of hope for the American people.

Everyone has realized the necessity for an international currency system reform and has reached a consensus that the U.S. dollar cannot be the only dominant currency in the world. But so far, we have not found a more reliable currency to replace the dollar, which puts the world financial system in a very difficult transitional period.

As it is hard to build a new global currency system in such a short time frame, the dollar and global currency fluctuations will be inevitable for a considerable period of time.