It's about international trade, not China's domestic growth, China is the world biggest trader and top trading partner of most countries in the world, China is working on getting more countries to do trade with China with Yuan, one country at a time.
View attachment 924983
That's becasue trade have very little impact on Currency Market. As
@Mista say, ever wonder why China dominant trade in the last 20 years but not currency market
Because trade are always two ways, you buy/sell, import/export, receive/pay there aren't really that much money changed hand in the end. Even with large deficit like US/China, you are still talking about sub 100 billions deficit (some 75 or 78 billions now, I can't remember the number on top of my head)
Yes, that seems like a big number to smaller countries, but to the top 10 in the basket, this number is nothing The total circulation of USD is around 23 trillion, total circulation of Euro is about 13 trillions Euro, even CYN have about 5 to 8 trillions in circulation, some 70 billions going one way or the other would not impact the entire currency regime. At the end of the day, all you need is to have that deficit ready, not the entire trade amount. Which mean country would only demand a small amount of currency for trade.
On the other hand, if we look at current transaction (like remittance, credit card payment, loan payment, line of credit stuff). That's another story , currency transaction happens around 8 trillions dollars worth a day,
A SINLGE DAY. Which mean every single day, a packet of money would be transferred say from say Hong Kong to Australia and those packet make up 8 trillion trade a day, that is what currency are needed and you can't use either origin or destination currency because they don't spend Australian Dollars in Hong Kong and they don't spend Hong Kong dollars in Australia, you need a third currency that are common to put the value in during the transfer The problem is, you would want a currency that back these settlement, you want a stable currency, you want one that would not be fluctuated, because unlike trading, you don't have a tangible things to back that currency transaction as in I don't pay money for a phone, I pay money for money in currency transaction, and that solely depends on monetary policy of a country, that's why USD, not CYN was used, as long as this remain the norm, no matter how much trade volume China increase, it wouldn't be able to challenge the USD, because you only need a small amount of money to back up trade as it itself is backed up by the goods.