China positioning its currency for a run at world supremacy by 2020?

April 5, 2009 by · Leave a Comment
Filed under: Currency News 

In my opinion I do not see the dollar as the “only” dominant currency by 2020 either, with China, India and Brazil working hard to provide employment and raise the standards of their people, to accomplish this, they will need to provide stability and that will make those countries more attractive to invest in and that is the biggest reason people invest in the dollar.  If we were more responsible with how we handled our currency, we would not hear these calls as loud as we do in these current times.  It will be interesting to see how this plays out.

News (LA Times):

Reporting from Shanghai — Could the world’s currency of choice have the face of Mao Tse-tung on it, not George Washington?   Quixotic or not, the Chinese are preparing for that day.

In a series of what might be called baby steps, Chinese officials recently have moved to globalize the yuan and promote its influence overseas, with Shanghai designated as command central.

Since last December, China has signed deals with six countries, including South Korea, Malaysia and most recently Argentina, for currency swaps that would inject Chinese money into foreign banking systems. That would allow foreign companies to pay for goods they import from China in yuan, bypassing the dollar — the currency that dominates international trade and finance, including foreign exchange reserves.

Beijing is also taking initiatives to use the yuan, also known as the renminbi, to settle trade accounts between some Chinese provinces and neighboring states, starting with Hong Kong.

“The central bank has set promoting the renminbi for payment settlements as the main task for this year’s work,” said Shi Lei, an analyst in the global financial markets section at Bank of China in Beijing.

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