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Economists: real economy key to yuan's global path
By Hu Xiaocen |
November 28, 2012, Wednesday
|
Online Edition
Online Edition
THE globalization of Chinese yuan requires underlying support of a sound economy and prudent regulation, Tan Yaling, president of China Forex Investment Research Institute, told a forum in shanghai today.
"The market and the media were 'impetuous' about yuan going global," Tan said. "Economic conditions are critical to yuan globalization."
She cautioned that liberalization procedure must adhere to the economic cycle, and the world is in critical crisis at the moment. China doesn't meet the underlying conditions of global yuan as a tremendous amount of its foreign exchange reserve is in the US dollar.
"The US dollar is dominant. It determines the price of everything. The depreciation of its value doesn't necessarily mean the diminishing power of the currency. In fact, it's in line with the United States' interest of its globalization strategy," she said.
Without prudent regulation or sound real economy yuan globalization could even reverse what China have accumulated in the past 30 years, she cautioned.
Tan stated the fact that cross-border yuan settlement for trade is losing its ground for growth, as China's trade activities contracted from 20 percent increment to 10 percent this year, according to her institution's forecast.
"The market and the media were 'impetuous' about yuan going global," Tan said. "Economic conditions are critical to yuan globalization."
She cautioned that liberalization procedure must adhere to the economic cycle, and the world is in critical crisis at the moment. China doesn't meet the underlying conditions of global yuan as a tremendous amount of its foreign exchange reserve is in the US dollar.
"The US dollar is dominant. It determines the price of everything. The depreciation of its value doesn't necessarily mean the diminishing power of the currency. In fact, it's in line with the United States' interest of its globalization strategy," she said.
Without prudent regulation or sound real economy yuan globalization could even reverse what China have accumulated in the past 30 years, she cautioned.
Tan stated the fact that cross-border yuan settlement for trade is losing its ground for growth, as China's trade activities contracted from 20 percent increment to 10 percent this year, according to her institution's forecast.
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