Hypocrisy mars RMB devaluation debate

A Chinese clerk counts RMB (renminbi) yuan banknotes at a bank in Huaibei city, east China's Anhui province, 11 August 2015. China's sudden decision last month to devalue its currency riled neighbors and fueled investors' fears about a sharp slowdown in the world's No. 2 economy. (Photo: AAP)

Author: Stephen Olson, Hinrich Foundation

The verdict on China’s recent currency devaluations differs depending on who you listen to. To some, the devaluations are either a positive and responsible step in the direction of a more market-determined exchange rate and a liberalised financial system. To others, they are potentially destructive, beggar-thy-neighbour competitive devaluations intended to prop up declining GDP growth by unfairly boosting exports. Read more…

Chinese currency manipulation not a problem

A Chinese clerk counts renminbi banknotes at a bank in Huaibei city, Anhui province, China on 22 January 2015. (Photo: AAP).

Author: Jeffrey Frankel, Harvard University

America’s two political parties rarely agree, but one thing that unites them is their anger about ‘currency manipulation’, especially by China. Perhaps spurred by the recent appreciation of the dollar and the first signs that it is eroding net exports, congressional Democrats and Republicans are once again considering legislation to counter what they view as unfair currency undervaluation. Read more…

Crossing this Chinese river needs building a large bridge

Visitors look at the art work by American artist Tony Oursler entitled 100 Yuan which features a projection of a Chinese renminbi note with a talking Mao Zedong at a gallery in Beijing, China. (Photo: AAP).

Author: Peter Drysdale, Editor, East Asia Forum

China’s approach to economic reform is commonly characterised by Deng Xiaoping’s metaphor of ‘crossing the river by feeling the stones’. This is the experimental approach to economic and social reform. It is typified by the successful implementation of the household responsibility system that saw the transformation of Chinese agriculture and the early liberalisation of trade and investment through the establishment of Special Economic Zones together with economic experimentation in Guangzhou. Read more…

The forces driving RMB internationalisation

A Chinese clerk counts renminbi banknotes at a bank in Xuchang city, Henan province, 8 December 2013. (Photo: AAP).

Author: Yu Yongding, CASS

When renminbi internationalisation was making rapid progress in 2011, some leading investment banks predicted that by the end of 2012 Hong Kong’s offshore RMB deposits would reach more than 1 trillion yuan, cross-border RMB trade settlement would surpass 3.7 trillion yuan, and RMB-denominated bonds and loans would grow to 700 billion yuan. These predictions were way off the mark. However, on the other hand, RMB trade settlement has maintained its growth momentum: Read more…

Financial scenarios for Asia and the world

Visitors look at jewellery displayed at a jewellery fair to attract Chinese consumers in Shanghai, China. (Source: AAP)

Author: Andrew Sheng, Fung Global Institute

The Asian century is a foregone conclusion, but no-one has clarified whether it will be good or bad for Asia.

The region has 60 per cent of the world’s population and, according to Asian Development Bank estimates, will probably be responsible for half of global GDP and financial assets by 2050. Asia is too big to ignore and too diverse to be able to predict how it will shape this century. Read more…

Experimenting with the Chinese currency

A Chinese clerk counts yuan bills at a bank in Suzhou city, southeast Chinas Jiangsu province on 31 December 2012. (Photo: AAP)

Author: Liu Dongmin, IWEP

After becoming the new Chinese leader, Xi Jinping chose Shenzhen as his first visit outside Beijing and made the Qianhai special economic zone his first stop in Shenzhen. This was a clear signal of Qianhai’s position at the forefront of further reform and opening in China. Read more…

Renminbi internationalisation and the international monetary system: a match made in heaven

This photo taken on 9 October 2011 shows pedestrians walking past a currency exchange outlet in Hong Kong with the rates (815/824) against the Chinese yuan posted in the window. China is resisting US demands to speed up yuan reforms and let its currency appreciate at a faster pace, even as it pursues a long-term goal of making the unit more widely used overseas, analysts say. (Photo: AAP)

Author: Sourabh Gupta, Samuels International

On 2 November, on the sidelines of the G20 leaders meeting in Cannes, Zhang Tao, director general of the international department of the People’s Bank of China (PBoC), averred that China’s foreign exchange management strategy was based on ‘the principle of safety, liquidity and adding value’.

Given the US$271 billion in reserve losses presumed to have accrued during the 2003-2010 period as a result of the US dollar’s depreciation, this notion of ‘safety’ appears to be a rather elastic one. Read more…