China’s State Council or Cabinet’s decision to permit the use of Ren-Min-Bi (RMB) , in cross-border trade settlement, as part of its long-term plan to globalize its currency and reduce the domination of the US dollar, will eventually reshape forces at play in international foreign exchange (forex) markets.
Presently, the currency of China — the world’s third largest economy and trading nation — is not exerting befitting influence in the forex markets due mainly to limited use of the Yuan in international trade and investments, as well as restrictions placed on its supply and convertibility.
However, the window to Yuan’s liberation was opened wider when Beijing launched the pilot scheme on RMB cross border trade settlement on July 6.
Appetite to create global reserve bank to issue the currency and monitor national exchange rate is brewing. In early 2009, the BR IC’s proposed replacing the US$ as the main reserve currency following the financial crisis due to the collapse of US mortgage market that led to the worst global recession since World War II.
Also, the economic power is shifting from G7 countries that saw increasing acceptance of the other economies currencies. And if US recovery is weak, rates will remain low, thus pressuring the US$ to stay weak.
Who are China’s Leaders? How do they think? What does it mean for the future? These are the questions of the moment as New China celebrates its 60th anniversary, because China impacts everyone — an economic superpower competing in every arena of human endeavor. But China’s astonishing transformation comes with challenges and contradictions. Is there a looming “China Threat?” Or an emerging “China Model?”
How China’s Leaders Think — The Inside Story of China’s Reform and What This Means for the Future draws on personal, candid conversations with over 100 Chinese leaders across all sectors to delve into the way Chinese leaders think. Author Dr. Robert Lawrence Kuhn presents an insider’s view of how those who lead China feel about their country’s growing global strength — in trade, business and finance; in diplomacy, defense and security; in science, technology and innovation; in culture, media and sports — and how this impacts the world.