Yuan achievement is remarkable, with consideration that the currency isn't fully convertible. I am surprise Germany and Australia are also countries using Yuan as trade currency...
Yuan becomes second-most popular currency in trade finance
HONG KONG — The Chinese yuan has overtaken the euro to become the second-most used currency in global trade finance, according to global transaction-services body SWIFT.
The currency had an 8.66 per cent share of letters of credit and collections in October, compared with 6.64 per cent for the euro, said SWIFT in a statement yesterday.
China, Hong Kong, Singapore, Germany and Australia were the top five countries using the yuan for trade finance in October, it said.
In January last year, the yuan’s share of global trade finance was 1.89 per cent, compared with 7.87 per cent for the euro.
“It’s true that overseas exporters are using the yuan more as the contract currency to increase the attractiveness and competitiveness of goods or services sold to China,” said Ms Cynthia Wong, Head of emerging-market trading for Singapore and Hong Kong at Societe Generale.
The yuan now ranks behind the US dollar, which remains the leading currency with a share of 81.08 per cent.
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http://www.todayonline.com/business/yuan...de-finance
Australia is not surprising because they supply raw materials to China. I won't be surprised if iron ore and coal are quoted in RMB next year.
Germany is surprising. I thought they would have higher bargaining power to keep it quoted in EUR.
For Germany, it may be for the machines that
manufacturing sectors are using.
(04-12-2013, 03:25 PM)specuvestor Wrote: [ -> ]Australia is not surprising because they supply raw materials to China. I won't be surprised if iron ore and coal are quoted in RMB next year.
Germany is surprising. I thought they would have higher bargaining power to keep it quoted in EUR.
It showed the increasing bargaining power of China over Europe...
Many countries will forget about USD soon.
Took a generation or 40 years for people to forget how mighty the pound once was.
Major macro trends take a much longer time than people have patience for... China rise is another example
I think even if US dollar drop to par with singapore it will still be the dominant player there will be many reasons why people will still support the dollar but chiefly it's security.
China unfortunately has bad image overseas and haven't yet cultivated "soft power" many countries see china people as loud arrogant uncultured greedy kiasu for all the wealth that they have now they still haven't yet learn subtlety and etiquette and how to settle disputes peacefully by process and not use force for everything.
(05-12-2013, 02:19 PM)sgd Wrote: [ -> ]I think even if US dollar drop to par with singapore it will still be the dominant player there will be many reasons why people will still support the dollar but chiefly it's security.
China unfortunately has bad image overseas and haven't yet cultivated "soft power" many countries see china people as loud arrogant uncultured greedy kiasu for all the wealth that they have now they still haven't yet learn subtlety and etiquette and how to settle disputes peacefully by process and not use force for everything.
Well, a country image and its currency as trade currency, doesn't seems connected. So I assume the internationalization of RMB might not be handicapped by the China people image.
(05-12-2013, 02:32 PM)CityFarmer Wrote: [ -> ] (05-12-2013, 02:19 PM)sgd Wrote: [ -> ]I think even if US dollar drop to par with singapore it will still be the dominant player there will be many reasons why people will still support the dollar but chiefly it's security.
China unfortunately has bad image overseas and haven't yet cultivated "soft power" many countries see china people as loud arrogant uncultured greedy kiasu for all the wealth that they have now they still haven't yet learn subtlety and etiquette and how to settle disputes peacefully by process and not use force for everything.
Well, a country image and its currency as trade currency, doesn't seems connected. So I assume the internationalization of RMB might not be handicapped by the China people image.
Of course it's connected. Think of the recent territorial disputes China has with Japan, Phillippines Taiwan Vietnam. If the Americans do not have money to support security presence in Japan or in nato China would have railroad them long time ago, same with phillippines taiwan etc ...
Same with the arabs they support US price their oil in greenbacks buy their treasuries even though they know the dollar anytime can become junk in return they get security provided by the americans. If Americans were not around the Iraqis or Iranians would have swallowed the wahabbies long time ago.
So for security reasons even everybody know value of dollar is falling they will still buy us treasuries trade goods in us all to support the dollar.