Trade conflict offers China opportunity for yuan globalization: ADB
The Chinese currency’s internationalization has been slower than some expected, but trade tensions may offer motivation to accelerate efforts
An ongoing trade spat between the US and China – which could come to a head over the summer if heavy tariffs are slapped on Chinese imports to the US – may have a silver lining for Beijing.
Speaking at a summit in Shanghai this week, senior advisor for the Asian Development Bank, Noritaka Akamatsu, said that trade tension could provide an opening to speed up the globalization of the Chinese yuan.
“The cautious attitude of the Chinese authorities till now was only wise,” Akamatsu said, as quoted by The Asset, acknowledging that the internationalization of the currency has been “slow so far.”
“But going forward, the trade tension with the US may provide a good opportunity as well as challenges to accelerate the internationalization,” he added.
“We at ADB are also paying close attention to the internationalization of the renminbi, particularly at this very time of trade tension,” says Akamatsu.
China’s currency has already been added to the IMF’s special drawing rights basket, but internationalization has been slow since its inclusion two years ago.
“Bond Connect, Panda bonds and credit rating internationalization and Regulation are all keys to internationalizing renminbi as well as financing Belt and Road projects,” he adds.