Although capital controls ensure that worldwide use of Chinaââ?¬â?¢s currency, the Renminbi, has lagged far behind the\r\nnationââ?¬â?¢s influence on world markets, Chinaââ?¬â?¢s currency is seeing greatly increased use in cross-border trade as a vehicle\r\ncurrency. This trend accelerated in the aftermath of the global financial crisis amidst successive agreements with\r\nneighbouring countries such as Japan and Russia to move away from the dollar in favour of using their own currencies\r\nfor bilateral trade. Other key steps include the establishment of a full offshore Renminbi market in Hong Kong in\r\n2010 and the September 2013 establishment of the Shanghai free-trade zone. Meanwhile, offshore Renminbi bond\r\nissuance not only reached a cumulative total of nearly RMB 400 billion in Hong Kong by the third quarter of 2013 but\r\nalso was being joined by such new offshore Renminbi bond centres as Singapore, Taiwan and London. It is no longer\r\nso farfetched to imagine the greenback being replaced by a new ââ?¬Ë?redbackââ?¬â?¢ standard in the long run.
Loading....