China must foster inter-region trust and confidence to further Rmb growth
With China’s growing importance as a trading partner in Asia, its ambitions for a bigger role for the Rmb in the international stage may soon be realised. April 26, 2013 | Donghyun ParkThe seismic shift in the global economic landscape in recent years consists of a sustained transfer of economic power from advanced countries to developing countries. In particular, China has emerged as the third major hub of the world economy alongside the US and the EU. The global financial and economic crisis of 2008–2009 accentuated this shift from the north to the south. The eurozone sovereign debt crisis has knocked the wind out of Europe’s stuttering recovery, while political deadlock over fiscal policy continues to cloud US growth prospects. While Abenomics has raised some early hopes, there is no guarantee that it will cure Japan of its decades-long slump. In short, the advanced countries remain mired in uncertainty and stagnation. In striking contrast, developing countries have largely shrugged off the global crisis and are growing at a healthy pace, giving rise to a two-speed world economy. China’s rise as a trading power has had far-reaching consequences for its neighbours Figure 1. China's exports to East and Southeast Asia, 1993-2012 China’s imports from East Asia and Southeast Asia has risen sharply Figure 2. China's imports from East and Southeast Asia, 1993-2012 The global financial architecture does not yet reflect this drastic change in the global economic landscape. In particular, the US dollar continues to dominate international trade and finance. According to the IMF’s COFER statistics, the dollar accounted for 61.8% of allocated foreign exchange reserves in the fourth quarter of 2012. The euro comes in a distant second at 26.0% with the British pound, Japanese yen and Swiss franc combining for a further 7.7%. These five cu... Please login to read the complete article. If you already have an account, you can login now or subscribe/register.
Categories: Capital & Strategic Issues, Cash, Treasury & Trade, China, Risk and Regulation, Rmb, Transaction BankingCapital & Strategic Issues,cash,China,Risk and Regulation,Rmb,Transaction Banking, Capital & Strategic Issues,Cash, Treasury & Trade,China,Risk and Regulation,Rmb,Transaction Banking, Keywords:ADB, Donghyun Park, IMF, Zhou Xiaochuan, PBoC ADB, Donghyun Park, IMF, Zhou Xiaochuan, PBoC
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