China’s Yuan Aims High: Conditions for Equal Footing with USD and Euro

Chinese economist Chen Yulu, a former vice governor of the People’s Bank of China (PBOC), has outlined three key conditions for the Chinese yuan to achieve equal standing with the U.S. dollar and the euro as a global currency.

Already the third-largest international currency, the yuan’s market share and influence continue to grow. To realize this vision by 2035, Chen stresses the need for a modern industrial system supported by the real economy, deepening domestic financial markets, significant progress in yuan internationalization infrastructure, and a balance between the opening of China’s financial system and risk control.

Renmin University’s report further suggests pursuing free-trade agreements to promote yuan use overseas and actively participating in digital trade rule formulation. While some, like Nobel laureate Paul Krugman, doubt the yuan’s potential to replace the U.S. dollar as the world’s reserve currency, a growing number of countries are increasingly engaging in trade using the Chinese yuan.

Clever Robot News Desk 27^th July 2023