This article tells how US firms are now using Chinese Yuan as a reserve currency instead of US dollar. This transition is brought about by China's effort to make the yuan a global reserve currency by debilitating the controls it previously had on its currency and making it readily available to local companies.
Will the Chinese Yuan take over US Dollar? only time will tell.
I think it is only a temporary situation. Even China has a key status in global market, no matter in goods or labor, Chinese Yuan is still not a significance currency. Yuan has been stable, compared to other currencies, but which is due to the political economy system in China. I don't think it is possible that Yuan will take over US Dollar, at least in the next 50 years.
ReplyDeleteSijia has made an interesting comment. I have always been curious why Yuan is not widely recognized as a global currency. This may partly have to do with China trying to under-value its currency. However, China also holds a large number of US dollars and if they sell it into the global market, US could be in big trouble. This, I feel is a cold-war in essence and would be interesting to see what the future has in store for us.
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