Yuan trade move 'far reaching'

[lostinblue]

The Chinese government's decision this month to let exporters in a small number of cities settle their overseas trade in yuan rather than in US dollars has far-reaching implications, according to economists, even though the immediate impact is minimal.

http://www.atimes.com/atimes/China_Business/KD21Cb01.html

[Sebastian]

Curious, no Taiwan Businessmen were quoted.

 

Oh Well. Shift Some Renmimbi, la.

 

If I"m reading this right - it smells like the 'foreigners' will be buying RMB with US Dollars prior to settlement, so this well help shore up US Currency Reserves in China.

Edited April 22, 2009 by Sebastian (see edit history)

[Guest ShaQuaNew]

The Chinese government's decision this month to let exporters in a small number of cities settle their overseas trade in yuan rather than in US dollars has far-reaching implications, according to economists, even though the immediate impact is minimal.

http://www.atimes.com/atimes/China_Business/KD21Cb01.html

 

Very interesting article. We've been hearing about this in Chinese news lately.

 

Transaction volumes are likely to be modest at the outset, but "that should not worry Beijing too much", said Loong. "The scheme is to test-run convertibility on the capital account while giving a helping hand to importers and exporters. The volume will rise when the Chinese currency gains market acceptance."

 

China's move to extend use of the yuan comes as concern grows that increased US government spending to halt the financial crisis will reduce the value of the US dollar. That could reduce the amount of money earned by Chinese exporters if the yuan were to strengthen against the US currency. It could also reduce the value of US Treasuries held by the Chinese government.

 

If over time, the Yuan increases in value on the world stage, this small "test" move could impact the US dollar.

[GZBILL]

The Chinese government's decision this month to let exporters in a small number of cities settle their overseas trade in yuan rather than in US dollars has far-reaching implications, according to economists, even though the immediate impact is minimal.

http://www.atimes.com/atimes/China_Business/KD21Cb01.html

 

Very interesting article. We've been hearing about this in Chinese news lately.

 

Transaction volumes are likely to be modest at the outset, but "that should not worry Beijing too much", said Loong. "The scheme is to test-run convertibility on the capital account while giving a helping hand to importers and exporters. The volume will rise when the Chinese currency gains market acceptance."

 

China's move to extend use of the yuan comes as concern grows that increased US government spending to halt the financial crisis will reduce the value of the US dollar. That could reduce the amount of money earned by Chinese exporters if the yuan were to strengthen against the US currency. It could also reduce the value of US Treasuries held by the Chinese government.

 

If over time, the Yuan increases in value on the world stage, this small "test" move could impact the US dollar.

 

For me, a freely convertible RMB couldn't come soon enough.