Let&aposs back up. Suppose you&aposre a textile manufacturer in Malaysia, and you want to sell your goods all across Asia and beyond. You sell those goods on credit, letting buyers pay you later for goods shipped today. But what currency should that credit be extended in? You might prefer it be denominated in Malaysian ringgit. Your buyers would prefer their home currencies--the Indonesian rupiah, the Thai baht, whatever. So you settle on something neutral--a currency that is viewed as having stable value and which
That is, we expect that this population in China (read: middle class) will go from about 20 million to 200 million people in the . Regardless of China’s (whether an intentional devaluing of the yuan to spur exports and growth or a competitive-based market adjustment), a weaker currency generally leads to a decrease in imports because it is more expensive to buy foreign products.
As the most populous country in the world and third largest in area, China also has the largest number of neighbours (14) sharing its 22,000km land borders namely: North Korea, Russia, Mongolia, Kazakhstan, Kyrgyzstan, Tajikistan, Afghanistan, Pakistan, India, Nepal, Bhutan, Myanmar, Laos and Vietnam. China has had, or still has, border issues with some of its neighbours. The biggest outstanding border issue is with India. This paper reviews the origins of China’s border disputes with its neighbours,
Before the yuan can become a global currency, it must first be successful as a reserve currency. That would give China the following benefits.On November 30, 2015, the awarded the yuan.
Let’s start with where those reserves came from in the first place. The central bank, the People’s Bank of China (PBoC), racked up the reserves by selling its own currency for dollars (and, to a lesser extent, other foreign currencies), which kept the yuan cheaper than its market value.