China sets ambitious long-term goals both in politics and the economy. Beijing is taking determined efforts to ensure the status of the second largest economy in the world. One of such goals is the international use of the yuan in the global trade. In other words, China aims to make the yuan a full-fledged reserve currency. Inspired by this idea, Beijing opened the domestic financial market for foreign investors.
People’s Bank of China Governor Zhou Xiaochuan shared his plans on further globalization of the national currency. “We have taken sufficient measures in the process of internationalization of the yuan which from now on will allow the yuan to be used in trade and investment,” Xiaochuan said at a press conference on Friday. “Moreover, the yuan has been included in the SDR currency basket. The key procedures have already been carried out.” Meanwhile, the central bank is aware that market participants will hardly switch to the yuan for international settlements in the short term. However, the top official said that the idea of financial openness should be implemented gradually. Indeed, this strategy is bearing fruit. A few years ago, hardly anyone believed that the Chinese yuan would be ever included in the basket of major international currencies. In October 2016, the renminbi was added to the CDR by the IMF. “We cannot force anyone, decisions are made based on their own logic,” the PBC’s leader commented on the IMF decision. Zhou Xiaochuan said that he is committed to the assigned mission to encourage the wide use of the national currency abroad.
