China's De-Dollarization Is Proceeding Apace

[TaiShang]

China Moves to Destroy the US Dollar, Launches Gold-Backed Petroyuan

China has just launched the petro-yuan, a gold-backed currency directly challenging the US dollar signaling the beginning of the end of the American greenback

Matt Agorist

In a massive move against the global dominance of the U.S. dollar, China’s highly anticipated Petro-Yuan has been launched in Shanghai. With China being the world’s largest consumer of oil, this new currency is an international game-changer that was a predicted move by China to directly compete—and subsequently devalue—the US dollar.

Analysts call the plan,
announced by Beijing in September, a huge move against the dollar’s global dominance – and reserve currency status.

The Chinese government reportedly plans to allow the crude oil futures contract priced in yuan to be fully convertible into gold.

As TFTP reported at the time, in addition to serving as a hedging tool for Chinese companies, the contract will allow for increased use of the yuan in trade settlement.

These contracts will thus enable China’s trading partners to pay with gold or to convert yuan into gold without the necessity to keep money in Chinese assets or turn it into US dollars, according to Bloomberg.

Essentially, the new benchmark will allow exporters, such as Russia, Iran or Venezuela to avoid US sanctions by trading oil in yuan that is convertible to gold – thereby negating the hegemony of the petrodollar.

On Monday, trading of the new oil futures contracts for September settlement started on the Shanghai International Energy Exchange at 440.20 yuan ($69.70) per barrel, reports Chinese daily the South China Morning Post. Some 18,540 lots have reportedly been sold and purchased so far.

As Bloomberg reports, the Petro-Yuan is a direct challenge to the dollar’s dominance. However, whether or not it will have an immediate effect remains to be seen.

Shady Shaher, head of macro strategy at Dubai-based lender Emirates NBD PJSC, says it makes sense in the long run to look at transactions in yuan because China is a key market, but it will take years. Bloomberg Gadfly columnist David Fickling argues that China doesn’t have “nearly the influence in the oil market needed to carry out such a coup.” On the other hand, paying in yuan for oil could become part of President Xi Jinping’s “One Belt, One Road” initiative to develop ties across Eurasia, including the Middle East. Chinese participation in Saudi Aramco’s planned initial public offering could help sway Saudi opinion toward accepting yuan, which is used in only about 2 percent of global payments.

Leading economist, Carl Weinberg, managing director at High Frequency Economics, goes even further, predicting a major paradigm shift. Weinberg told CNBC last year that China will likely “compel” Saudi Arabia to abandon the petrodollar, and instead, begin trading oil in yuan—a move he says is likely to precipitate the rest of the oil market following suit and abandoning the U.S. dollar as the global reserve currency.

At the BRICs summit last year, Russian President Vladimir Putin expressed Russia’s support for the Petro-Yuan to specifically challenge the “unfairness” of the US dollar’s global dominance.

“Russia shares the BRICS countries’ concerns over the unfairness of the global financial and economic architecture, which does not give due regard to the growing weight of the emerging economies. We are ready to work together with our partners to promote international financial regulation reforms and to overcome the excessive domination of the limited number of reserve currencies.”

As the respected journalist/geopolitical analyst Pepe Escobar explains: ‘to overcome the excessive domination of the limited number of reserve currencies’ is the politest way of stating what the BRICS have been discussing for years now; how to bypass the US dollar, as well as the petrodollar.

“It is more of a game changer for the US. As soon as other nations have a real credible alternative to the US dollar, they can dump dollars and switch to the yuan which can spark a dollar crisis. If that happens, not only will there be inflation from the tariffs, but also from the flood of dollars,” Ann Lee, Adjunct Professor of Economics and Finance at New York University and author of the book ‘What the US Can Learn From China’, said.

Source: TheFreeThoughtProject

 

[TaiShang]

China taking first steps to pay for oil in yuan this year - sources

Updated: 2018-03-30

[Photo/VCG]
China is taking its first steps towards paying for imported crude oil in yuan instead of the US dollar, three people with knowledge of the matter told Reuters, a key development in Beijing’s efforts to establish its currency internationally.

Shifting just part of global oil trade into the yuan is potentially huge. Oil is the world’s most traded commodity, with an annual trade value of around $14 trillion, roughly equivalent to China’s gross domestic product last year.

A pilot program for yuan payment could be launched as early as the second half of this year, two of the people said.

Regulators have informally asked a handful of financial institutions to prepare for pricing China’s crude imports in the yuan, said the three sources at some of the financial firms.

“Being the biggest buyer of oil, it’s only natural for China to push for the usage of yuan for payment settlement. This will also improve the yuan liquidity in the global market,” said one of the people briefed on the matter by Chinese authorities.

China is the world’s second-largest oil consumer and in 2017 overtook the United States as the biggest importer of crude oil. Its demand is a key determinant of global oil prices.

Under the plan being discussed, Beijing could possibly start with purchases from Russia and Angola, one of the people said, although the source had no details of anything in the works.

Both Russia and Angola, like China, are keen to break the dollar’s global dominance. They are also two of the top suppliers of crude oil to China, along with Saudi Arabia.

The move would mark a major step in reviving usage of the currency of the world’s second-largest economy for offshore payments after several years of on-again, off-again measures.

If successful, it could also trigger shifting other product payments to the yuan, including metals and mining raw materials.

All three sources, who spoke to Reuters on the condition that they not be named, said the plans were at early stages. Officials at some of China’s state oil companies said they had not heard of such plans.

Crude futures

The plans coincide with this week’s launch of the first Chinese crude oil futures in Shanghai, which many expect to become a third global price benchmark alongside Brent and West Texas Intermediate crude.

Shanghai’s new crude contract is traded in yuan.

Besides the potential of giving China more power over global oil prices, “this will help the Chinese government in its efforts to internationalize renminbi (yuan),” said Sushant Gupta, research director at energy consultancy Wood Mackenzie.

Unipec, trading arm of Asia’s largest refiner Sinopec, has already inked a first deal to import Middle East crude priced against the newly-launched Shanghai crude futures contract.

US bank Goldman Sachs said in a note to clients this week that the success of Shanghai’s crude futures was “indirectly promoting the use of the Chinese currency.”

People’s Bank of China, the country’s central bank, did not respond to a Reuters request for comment on the plan. The Ministry of Commerce also declined to comment.

Internationalization

China’s plan to use yuan to pay for oil comes amid a more than year-long gradual strengthening of the currency, which looks set to post a fifth straight quarterly gain, its longest winning streak since 2013.

The yuan retained its No5 ranking as a domestic and global payment currency in January this year, unmoved from a year ago, but its share among other currencies fell to 1.7 percent from 2.5 percent, according to industry tracker SWIFT.

A slew of measures put in place in the last 1-1/2 years to rein in capital flowing out of the country amid a slide in yuan value has taken off some its shine as a global payment currency.

But the yuan has now appreciated 3.4 percent against the dollar so far this year, with solid gains in recent sessions.

“For PBOC and other regulators, internationalization of the yuan is clearly one of the priorities now, and if this plan goes off smoothly then they can start thinking about replicating this model for other commodities purchases,” said the person briefed on the matter.

It would not be easy, however, for China to shift the bulk of its commodity purchases to the yuan because of the currency’s illiquidity in forex markets.

Nearly 90 percent of all transactions in the $5 trillion-a-day currency markets involve the dollar on one side of a trade, while only 4 percent use the yuan, as per a triennial forex survey by the Bank for International Settlements.

 

[TaiShang]

Oil Exporters Ditching Dollar, Switching to Other Currencies

24.04.2018, RT News

Iran has decided to replace the dollar with the euro in foreign trade, thus joining an informal club of states, seeking to reduce reliance on the US currency in the oil industry.

Iranian government bodies and companies are being encouraged to use the euro as the main currency in their reports, statistics, publications and financial data.

“The dollar in Iran has no place in our transactions today, with traders preferring alternative currencies for their transactions. There’s no longer any need to continue using dollar-based invoices,” said Mehdi Kasraeipour, the Central Bank’s Director of Foreign Exchange Rules and Policies Affairs.

Tehran has responded to the US’ and its allies’ decision to extend anti-Iranian sanctions in March, which the Islamic Republic describes as “US-led economic collusion.”

“This is a politically motivated decision. Transactions in dollars go through American banks, which pose certain risks to Iran. There are no such risks in transactions in euros,“ said Alexander Razuvaev, director of the analytical department at Alpari.

Iran remains the largest manufacturer and exporter of hydrocarbon raw materials in the world, with EU member-states and China being its major beneficiaries. According to the Organization of Petroleum Exporting Countries, Tehran reaps some $70 billion dollars annually from sales of oil. The American dollar is often indicated as the deal currency between the country-exporter and the buyer, with reference oil being rated high even at stock exchanges in London and New York, which makes the dollar so special, granting it the status of the world’s most popular reserve currency.

Experts believe that the US should sound the alarm as Iran has shifted to the euro in its oil dealings; many oil exporters and importers are dissatisfied with the heavy dependence on the American currency. The world is trending to a so-called de-dollarization of the world energy market: such countries as Russia, China, Venezuela, and now Iran, are already on the list.

Since 2016, the St. Petersburg International Mercantile Exchange has been trading for Russian crude in rubles, Venezuela stopped accepting dollars for oil transactions last year, demanding the euro instead, while the Shanghai Exchange launched China’s first yuan-based crude oil futures last month.

Alexey Kalachev, analyst at the company Finama investment, stated that there were no restrictions in bilateral trade transactions in national currencies, which would become a means for Russia, Iran and Venezuela to bypass the risks of dollar transactions being blocked.

“A national currency must be easily convertible and be on the list of reserve currencies in order to become an alternative to dollar in energy transactions globally. China, which has launched yuan-based oil futures contracts, is the closest to the goal,” Kalachev said.

Last week, Iran’s Supreme Leader Ayatollah Ali Khamenei held “foreign intelligence” accountable for the “recent issues on the currency market,” asking the country’s secret services to “defuse the plots against the Islamic Republic.”

The Iranian rial has weakened as US President Donald Trump’s administration approaches a May 12 deadline to stay in or unilaterally pull out of the 2015 nuclear deal that eased the lion’s share of sanctions on Tehran. Despite the implementation of the accord, the risk of further restrictions and penalties has forced multiple companies to avoid or strictly limit their trade and investment in Iran.

The views expressed in this article are solely those of the speakers and do not necessarily reflect the official position of Sputnik.

 

[Jlaw]

Oil Exporters Ditching Dollar, Switching to Other Currencies

24.04.2018, RT News

Iran has decided to replace the dollar with the euro in foreign trade, thus joining an informal club of states, seeking to reduce reliance on the US currency in the oil industry.

Iranian government bodies and companies are being encouraged to use the euro as the main currency in their reports, statistics, publications and financial data.

“The dollar in Iran has no place in our transactions today, with traders preferring alternative currencies for their transactions. There’s no longer any need to continue using dollar-based invoices,” said Mehdi Kasraeipour, the Central Bank’s Director of Foreign Exchange Rules and Policies Affairs.

Tehran has responded to the US’ and its allies’ decision to extend anti-Iranian sanctions in March, which the Islamic Republic describes as “US-led economic collusion.”

“This is a politically motivated decision. Transactions in dollars go through American banks, which pose certain risks to Iran. There are no such risks in transactions in euros,“ said Alexander Razuvaev, director of the analytical department at Alpari.

Iran remains the largest manufacturer and exporter of hydrocarbon raw materials in the world, with EU member-states and China being its major beneficiaries. According to the Organization of Petroleum Exporting Countries, Tehran reaps some $70 billion dollars annually from sales of oil. The American dollar is often indicated as the deal currency between the country-exporter and the buyer, with reference oil being rated high even at stock exchanges in London and New York, which makes the dollar so special, granting it the status of the world’s most popular reserve currency.

Experts believe that the US should sound the alarm as Iran has shifted to the euro in its oil dealings; many oil exporters and importers are dissatisfied with the heavy dependence on the American currency. The world is trending to a so-called de-dollarization of the world energy market: such countries as Russia, China, Venezuela, and now Iran, are already on the list.

Since 2016, the St. Petersburg International Mercantile Exchange has been trading for Russian crude in rubles, Venezuela stopped accepting dollars for oil transactions last year, demanding the euro instead, while the Shanghai Exchange launched China’s first yuan-based crude oil futures last month.

Alexey Kalachev, analyst at the company Finama investment, stated that there were no restrictions in bilateral trade transactions in national currencies, which would become a means for Russia, Iran and Venezuela to bypass the risks of dollar transactions being blocked.

“A national currency must be easily convertible and be on the list of reserve currencies in order to become an alternative to dollar in energy transactions globally. China, which has launched yuan-based oil futures contracts, is the closest to the goal,” Kalachev said.

Last week, Iran’s Supreme Leader Ayatollah Ali Khamenei held “foreign intelligence” accountable for the “recent issues on the currency market,” asking the country’s secret services to “defuse the plots against the Islamic Republic.”

The Iranian rial has weakened as US President Donald Trump’s administration approaches a May 12 deadline to stay in or unilaterally pull out of the 2015 nuclear deal that eased the lion’s share of sanctions on Tehran. Despite the implementation of the accord, the risk of further restrictions and penalties has forced multiple companies to avoid or strictly limit their trade and investment in Iran.

The views expressed in this article are solely those of the speakers and do not necessarily reflect the official position of Sputnik.

Backing oil in EUR is still pointless as the EU still pay commodities in USD when dealing with their uncle Sam.

 

[TaiShang]

Backing oil in EUR is still pointless as the EU still pay commodities in USD when dealing with their uncle Sam.

I think Iran still feels more comfortable to deal with Europe than the US. A weakened US, also, may mean a less hegemonic Europe.

Without the US, for instance, England is just a small island and France is just a country that is bad at fighting wars.

The muscle of the West is the US. The rest is minions.

 

[TaiShang]

De-dollarization inevitable as yuan’s global status rises

Source:Global Times Published: 2019/1/3

Illustration: Luo Xuan/GT


The global economy and the trade governance system have shifted from an old model in which other economies were orbiting around the US toward a three-horse race - the US, EU and China - meaning that de-dollarization is inevitable. The global trade, production and consumption arena has become a three-way race among Asia, Europe and the US, but the international currency system has long been dominated by the US dollar, highlighting a mismatch between the real global economy and international currency system.

This mismatch has turned out to be the major contradiction facing the global economy and financial system, fueling the China-US trade dispute and prompting reforms in the global economic governance system.

Since China's accession to the WTO in 2001, the country has made phenomenal progress in trade terms. It went from accounting for less than 5 percent of global trade in 2000 to about 14.56 percent in 2017. China has become one of the world's three major trading powers, along with the US and Europe, which held a combined share of 43.53 percent of global trade in 2017.

On a larger scale, there is Asia pivoting on China, which held 27 percent of global GDP in 2017. The 28 EU member states that revolve around Germany and France accounted for 15.6 percent and the three North American Free Trade Agreement signatories, with the US at the core, held a 27.5 percent share.

But when it comes to global foreign-reserve currencies, the US dollar still holds a dominant position, followed by the euro. The yuan, for its part, only plays a minor role. The Chinese currency's global status is not in line with China's fundamentals, and it is inevitable that the yuan's share of international reserve currencies will be on the rise.

History shows that when the US dollar replaced the pound sterling, the size of the US economy had already far outstripped that of the UK. China's GDP is still less than that of the US, which suggests it will take more time for the yuan to overtake the US dollar. But in the current era, with such innovations as fintech, the reconstruction of global currency system may be faster than expected. De-dollarization and diversification of international currencies will inevitably happen.

Amid the trade friction with the US, China ought to join the Comprehensive and Progressive Agreement for the Trans-Pacific Partnership (CPTPP), advance WTO reforms and build an Asian community.

Joining the CPTPP could enable China to break out of the encirclement built by the US, thereby easing trade tensions. Meanwhile, it could put China at an advantageous position in the global production network and in setting relevant rules, so as to give momentum to China's reforms, which have entered the deep-water zone.

As for WTO reforms, China is supposed to play its part in reinstating the WTO's function as a forum for trade negotiations and improving the mechanism for resolving trade disputes, among other issues.

China is also moving up the global value chain, transitioning toward medium- to high-end manufacturing, while latecomer countries in Asia are carrying on in the midstream and downstream sectors, while Japan still dominates the high-end industries.

This signals a complete value chain in the region. The establishment of an Asian community at this moment can therefore enhance complementarity among Asian economies and boost their ability to withstand external risks.

The 10+3 cooperation mechanism, referring to the 10 member states of the Association of Southeast Asian Nations (ASEAN) plus China, Japan and South Korea, could be an ideal choice for the Asian community.

After a transition period of about two years, the Chinese economy is well-placed for robust growth over the longer run. Although the economy currently faces downward pressure, there are still plenty of measures in store to acceleate growth. A consensus ought to be reached as soon as possible: mobilizing all possible resources to drive growth.

The article was based on a speech by Ju Jiandong, a professor with Tsinghua University at a seminar held at PBC School of Finance, Tsinghua University in December. bizopinion@globaltimes.com.cn

 

[Stranagor]

Chinese Yuan's Share of Global Forex Reserves Hits Record High, IMF Data Shows

XU WEI
DATE : JAN 06 2020/SOURCE : YICAI

Chinese Yuan's Share of Global Forex Reserves Hits Record High, IMF Data Shows

(Yicai Global) Jan. 6 -- The Chinese yuan's share of foreign currency reserves held by central banks around the world reached a record high in the third quarter of last year to exceed that of the Swiss franc, Australian and Canadian dollars.

Yuan reserves rose to USD219.6 billion, making up 2.01 percent of global currency reserves, compared with 1.97 percent in the second quarter of 2019, the People's Daily reported on Jan. 4, citing new data from the International Monetary Fund.

Global forex managers are increasingly keen on the yuan to diversify their currency holdings amid China's expanding share of the world economy, an analyst told the People's Daily. The redback became an official global reserve currency in October 2016, when the IMF added it to the fund's special drawing rights basket.

The US dollar retained its position as the dominant reserve currency in the three months through September, though its share fell to 61.78 percent from 66 percent in 2014.

The IMF uses data from nearly 150 countries and regions that voluntarily report their forex reserves to the Washington-based organization.

https://yicaiglobal.com/news/chines...-aud-cad-in-global-forex-reserves-imf-reveals

 

[Stranagor]

Renminbi takes strides with stronger global presence

Xinhua, April 13, 2020

A bank staff counts Chinese currency Renminbi banknotes at a bank in Tancheng County of Linyi City, east China's Shandong province. [Photo/Xinhua]

China's renminbi, or the yuan, registered further internationalization and broader use abroad in 2019, with its role in facilitating global trade enhanced, according to the Bank of China (BOC).

Market entities, both at home and abroad, showed positive expectations for the renminbi as a global currency, the BOC said in its white paper on the renminbi's internationalization in 2019, after it surveyed over 3,000 companies and institutions in 28 countries and regions.

About 80 percent of the surveyed firms will consider seeking funding in renminbi, while nearly 70 percent are planning to raise their proportion of yuan use, said the paper.

Infrastructure of the offshore yuan market continued to improve in 2019, and overseas financial institutions can provide a wider range of products including settlement, financing and investment, said the BOC.

In 2019, the bank's cross-border renminbi settlement reported a total volume of 7.32 trillion yuan (about 1.04 trillion U.S. dollars), with its cross-border renminbi clearing volume at 434 trillion yuan.

http://www.china.org.cn/business/2020-04/13/content_75924042.htm

 

[Stranagor]

Nation viewed as key player in reformed global structure

By ANDREW MOODY | China Daily | Updated: 2020-05-21 08:01
http://www.chinadaily.com.cn/a/202005/21/WS5ec5c4c3a310a8b2411572a1_2.html

A freight train carrying medical supplies to combat the novel coronavirus leaves Wuhan, Hubei province, for Belgrade, Serbia, on May 9. [Photo/Xinhua]

Observers say China well-placed to fill void in financial system

Editor's note: The world faces huge challenges during the COVID-19 outbreak, and maybe even greater ones when it is over. Here, in the 11th part of a series titled "One World, One Fight", we look at how countries can work together to fight the virus and meet the challenges when the pandemic ends.


Many observers are asking whether the global institutional infrastructure needs major reform to cope with challenges posed by the novel coronavirus pandemic.

The world continues to be shaped by the World Bank and the International Monetary Fund, created following the Bretton Woods Agreement reached 76 years ago in New Hampshire in the United States.

The agreement came at a time when the US economy accounted for about 50 percent of global GDP and the US dollar had absolute primacy over the international financial system.

However, within the next 10 years, developing and emerging economies, including China's, will account for 60 percent of global GDP on a purchasing power parity basis, according to the Organization for Economic Cooperation and Development.

One of the primary focuses of Bretton Woods was to restart the global economy after the crippling effects of World War II.

When the pandemic is over, the world will again face significant macroeconomic challenges, particularly unprecedented and escalating debt levels.

Benn Steil, author of The Battle of Bretton Woods: John Maynard Keynes, Harry Dexter White, and the Making of a New World Order, one of the most comprehensive accounts of the 1944 conference, said any reform of institutions would require exhaustive negotiations.

"The original Bretton Woods was 90 percent pre-orchestrated through difficult negotiations between the US and the United Kingdom, which began in 1942, two years before the conference," he said.

"A new conference would also require prior substantial agreement between the two dominant economic powers, the US and China. At present, I do not see a sufficient locus of interests to achieve such a pre-agreement."

Michael Spence, professor of economics at New York University's Stern School of Business and a Nobel prize winner for economics, said there would have to be substantial input from China if the system was to be reformed.

"If it happens, China will have to play a major role. If China is left out, it won't work－just like if the US or Europe were not there," he said.

Michael Pettis, professor of finance at Peking University, said it is wrong to assume that China played no role in the formation of the existing system, as it sent the second-largest delegation to the Washington Hotel, where the Bretton Woods Conference was held.

"The idea that China was a limited participant in Bretton Woods is one of those lazy myths that seem to persist. It had an influence on a number of important issues," he said.

A worker checks a polyester yarn production line at a textile factory in Yushan, Jiangxi province. ZHUO ZHONGWEI/FOR CHINA DAILY

Regardless of China's input then and now, Kishore Mahbubani, a former Singapore diplomat and the author of Has China Won?, a new book that addresses the relationship between the US and China, said questions were being asked about the Bretton Woods global architecture well before the current health crisis.

"The World Bank needs to ask itself does it still want to insist on the rule that to become its head you must be an American, and similarly that to become head of the IMF must you be a European?" he said.

"That may have been a viable rule in 1940s and '50s, when the US and Europe combined comprised a great majority of the world's economy. However, now economic power has shifted, and if you don't make the rest of the world stakeholders, then these countries will just turn away. And it's not in the interest of the US and Europe to see the world turning away from the IMF and the World Bank."

The Bretton Woods system has seen a number of major shocks and reforms.

In 1971, US President Richard Nixon suddenly abandoned the dollar's convertibility into gold, because the US no longer had enough gold to cover the dollars in circulation.

The post-war fixed exchange rate system was based on this convertibility. The solution was to re-fix currencies to a devalued dollar.

In an increasingly globalized world, the financial system has become reliant on the dollar as a global reserve currency, and the pandemic has seen a retreat to the dollar, with the US still regarded as a lender of last resort.

George Magnus, a research associate at Oxford University's China Centre and at the School of Oriental and African Studies in London, believes this is unsustainable and that the Bretton Woods structure needs a 21st century makeover.

"It's not good that the US Federal Reserve is called on, crisis after crisis, to be a global lender of last resort, when its principal mandate is domestic," he said.

"Nor is it good that there's an insatiable demand for US dollar funding every time there's a crisis, especially in emerging markets, where capital is just hemorrhaging in at the moment."

Sun Mingchun, chief economist at Haitong International Securities, a securities company and investment bank based in Hong Kong, said the current system could suddenly reach a crisis point where it was no longer able to cope.

"It is perhaps too early to foresee such a scenario, although the lack of monetary policy discipline in major Western central banks in reaction to crisis has created lots of worries about the side effects of recent massive liquidity injection," he said.

"I am afraid that at some point in the not very distant future, the market will vote by its feet in the foreign exchange market."

Pettis, also author of Trade Wars Are Class Wars: How Rising Inequality Distorts The Global Economy and Threatens International Peace, believes the US can no longer bear the huge economic cost of acting as the world's central bank.

"While there may be a geopolitical advantage, it comes at an enormous economic cost. I think the coronavirus pandemic will only accelerate a process that began last August in the US Congress to force other countries to reduce their usage of the US dollar," he said.

"In the end, I suspect that over the next decade the US will move unilaterally to reduce global use of the dollar by taxing foreign use of it."

Shan Saeed, chief economist at IQI Global, an investment company based in Kuala Lumpur, Malaysia, believes the current system no longer acts in the interest of many countries.

Construction vehicles are driven aboard the Glovis Challenge at Yantai Port, Shandong province, for export to countries in East Africa. TANG KE/FOR CHINA DAILY

He would like to see an Asian Monetary Fund set up, with headquarters in Shanghai, which would reflect where the global financial system's center of gravity is shifting.

"The world needs a new reset and a monetary system that is based on fair play and equality. All countries should be invited to join the new monetary fund, not just Asian ones," he said.

Saeed believes that existing institutions will fail to help countries that become overburdened with debt as a result of the pandemic.

Citing the examples of Greece, Italy and Iran in the recent past, he said, "In all these cases neither the World Bank nor the IMF came forward to bail them out or give them support such as help with financial and structural reforms, a liquidity stress bailout or debt relief package."

Can China fill this void in the financial system and can the yuan act as an alternative reserve currency?

The Chinese government is intent on liberalizing its financial markets to make them attractive destinations for foreign capital, although this would rely on fewer capital controls and the yuan being more convertible than it is now.

Such a move is likely to gain momentum because China is facing twin pressures－increased domestic consumption and weak demand for its exports are set to turn the country's trade surplus into a deficit. It could also face a decline in domestic savings. Without these savings, it will need external capital to fund any trade deficit.

Zhu Ning, deputy dean and professor of finance at the Shanghai Advanced Institute of Finance, believes a major reform of the financial system, with the yuan playing a greater role, could suit China.

"To achieve that, China has to work harder on reforming its domestic interest rate liberalization and internationalization of the yuan," he said.

"There is increasing demand for reform of the global monetary system, and the yuan is clearly one potential candidate to diversify the pool of global reserve currencies."

A bird's-eye view of Lianyungang Port in Jiangsu province on April 14. GENG YUHE/FOR CHINA DAILY

http://www.chinadaily.com.cn/a/202005/21/WS5ec5c4c3a310a8b2411572a1_4.html

 

[rambro]

You know what Saddam Hussain real crime was? He started to trade Iraqi oil in Euros.

The same fate gaddafi had

 

[Daniel808]

https://twitter.com/x/status/1271722068405415938

 

[nahtanbob]

You want to hit American hard, make dollar redundant. Build CPEC, build the pipelines taking both Iranian and Saudi oil and gas into China, and pay in local currencies or barter trade. That will be the end of petro dollar.

I think Iranian and Saudi leaders can decide better than a pakistani

 

[Taimoor Khan]

I think Iranian and Saudi leaders can decide better than a pakistani

Iranians and Saudis.... LOL


Someone said a while back, when history will be written it will be said that Pakistan destroyed the Soviet union in Afghanistan with the help of American money, and then another chapter will be added that it was Pakistan which destroyed America in Afghansitan, with America own money.

America of 9/11, "either you are with us or against us", to the America of today, Enough said!

 

[nahtanbob]

Iranians and Saudis.... LOL


Someone said a while back, when history will be written it will be said that Pakistan destroyed the Soviet union in Afghanistan with the help of American money, and then another chapter will be added that it was Pakistan which destroyed America in Afghansitan, with America own money.

America of 9/11, "either you are with us or against us", to the America of today, Enough said!

Soviets had 115,000 troops and a communist regime in place in 1988. There was nothing left to destroy.
If Afghanistan was their only priority the Soviets would be beating the Afghan rebels like a drum for eternity.

 

[Taimoor Khan]

Soviets had 115,000 troops and a communist regime in place in 1988. There was nothing left to destroy.
If Afghanistan was their only priority the Soviets would be beating the Afghan rebels like a drum for eternity.

As I said, "from either you are with us or against us" to "please help us in talks with Taliban". Catch the drift.

You gave too much importance to Bedouins and Mullah of Qom.