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China’s Currency is destined to rise in global status

Editor: Tong Xinxin 丨CCTV.com

12-31-2015 11:45 BJT

By Christina Kitova, associate partner Hodges Media Communications, based in Oklahoma City, OK USA

It is little wonder that the Chinese currency, remninbi (RMB) or yuan is rising, as history tends to repeat itself. China has a very long history with the Yuan. During the days of bartering, China was one of the first to introduce a form of currency during the 4th Century BC and it was backed by bronze.

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The first Yuan had a circle in the middle that would symbolize it as circulating currency. In the next century, Shi Huangdi or Qin Shi Huang (259 BC- 210 BC), who was the first emperor of China, revised it with a square hole.

Paper currency had begun being used concurrently, when precious metal shortages started occurring. Within the 18th century, silver-made Yuan was introduced, while the paper Yuan had continued its circulation.

By building strong traditional alliances and forming a strong and healthy manufacturing sector that focused on exporting its goods, China’s economy has risen to high prominence.

Despite European economies continuing to plunge into a deepening recession, the failures of the European Union (EU) and its Euro currency do offer more opportunities for strengthening the Yuan.

The Yuan can easily become a currency that will compliment and trade against the US Dollar, and not to mention that Beijing currently holds over $1.27 trillion worth of U.S. Treasuries.

The proposed 5 year plan by Chinese President Xi Jin Ping and Chinese Premier Li Keqiang, offers an opening for China to import more goods and products from Russia, while its foreign investments headed to its northern neighbor would demonstrate positive trends in strengthening the Yuan.

Accordingly, Beijing and Moscow have gained significant momentum to become stronger nations in the long-term future.

The New Silk Road in trading and the building of its infrastructure has given display to the further development of the Far East.

China continues to be a strong contender and offers attractive opportunities for global investments.

The Yuan remains Russia’s most favored trading currency. The Moscow-based oil & gas giant, Gazprom accepts payments in the Yuan and the Russian Central Bank has created funding instruments and started issuing state debt in the Chinese currency.

Additionally, Argentina  holds robust trade ties with China.  And just a few days ago, Zimbabwe has adopted the Yuan as legal tender to write off its debt.

Beijing is securing more and more trading partnerships through the use of the Yuan.

Also, the expansion near the Red Sea and warm water ports can allow for more dealings that strengthen the Yuan within the global market place.

While abstaining from competing directly against the U.S. Dollar, China’s Yuan is strategically becoming the alternative reserve currency.

With China’s rich history of trading and dynasties, it’s only logical to see the positive direction it is taking.

Recently, the IMF (international monetary fund) has announced that on October 1, 2016, the Yuan will enter the Special Drawing Rights (SDRs) basket of reserve currency.

This is a groundbreaking move and offers the BRICS (Brazil, Russia, India, China and South Africa) countries strong momentum growth.

China remains a very strong contender to watch for as the western economies continue to struggle and trading the Yuan becomes increasingly more attractive that will lead the Chinese economy to better days ahead.

 

( The opinions expressed here do not necessarily reflect the opinions of Panview or CCTV.com. )

 

 

Panview offers a new window of understanding the world as well as China through the views, opinions, and analysis of experts. We also welcome outside submissions, so feel free to send in your own editorials to "globalopinion@vip.cntv.cn" for consideration.

Panview offers an alternative angle on China and the rest of the world through the analyses and opinions of experts. We also welcome outside submissions, so feel free to send in your own editorials to "globalopinion@vip.cntv.cn" for consideration.


 

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