The PRC has been calling for a reduction in reliance on the United States as an international reserve currency for a few years. Currently about two-thirds of global central bank reserves are held in US dollars. The idea is not to replace the US dollar with the yuan; it is to denominate reserves using a particular currency basket represented by the International Monetary Fund's Special Drawing Right, or SDR.
This idea is a favorite of left-leaning economists and financiers such as Joseph Stieglitz and George Soros; in 2009 it also attracted the positive interest of the Bank of Chinaís Zhou Xiaochuan, who is revered in Western financial circles as Chinaís God of Wealth. (See China discovers value in the IMF, June 10, 2009).
The idea is not that the yuan is ready for prime time; it is that the logic of growth (in the BRICs - Brazil, Russia, India, and China) and debt and the danger of default (in the United States and European Union) make it prudent to reduce reliance on the US dollar and denominate transactions in a unit of exchange that reflects the overall, changing character of the world economy.
For that matter, the PRC isnít even in the SDR yet.
Right now, the US dollar accounts for a little over 40% of the SDR; the euro, the Japanese yen, and the British pound account for the rest. 
Since the dollar actually accounts for over 60% of foreign currency reserves held by central banks, one can take the 40% weighting as a back-handed acknowledgment that there are already too many dollars out there compared to the weight of the US in the world economy.
The United States accounts for 16% of the IMFís funding quota (since IMF decisions require 85% approval, this gives the US a veto); the aggregated EU countries have something along the order of 25%; the China has a 10% share. Japan and the UK, which are probably hearing Chinese footsteps and wondering how long they can hold on to their share of the SDR basket, account for 6% and 4% respectively.
Whatís holding back China from taking a share of the SDR basket is the fact that the PRC hasnít decontrolled its capital markets sufficiently to make central banks comfortable holding yuan reserves. If/when the capital account is decontrolled and the PRC can issue creditworthy, tradable government bonds suitable for parking the reserves of foreign central banks, the PRC can make a case for getting in the SDR basket, maybe at a 10-15% level, maybe at the expense of the US share, maybe by sticking it to the UK or Japan.
Maybe thatís a long way off. But, maybe it isnít, per Associated Press :
Beijing agreed Tuesday to make London a center for handling investment denominated in China's tightly controlled currency ...
Investors in London will be allowed to apply for licenses to invest yuan directly into China, Osborne announced. He said the Chinese central bank set an initial quota for London of 80 billion yuan (US$12.7 billion).
Finally, Schmitz beats NPRís "China seeking to replace US$ with yuan as international reserve currency" straw man by accusing the PRC of "not putting its money where its mouth is" hypocrisy, since "third-quarter figures showed that China now has $3.7 trillion in foreign exchange reserves. This figure represented the highest quarterly growth of Chinese investment in US debt in two years."
I do wonder where he got that "investment in US debt" number. Chinese foreign exchange holdings are going up sharply again after two yearsí pause, ironically since the PRC is apparently acquiring "Asian safe haven" status compared to the other local economies that donít have tight capital controls and expect to get pummeled by capital flight when the QE taper eventually kicks in. But those holdings donít all get invested in US debt.
The most recent Treasury numbers I could find go up to July 2013 and show that official Chinese holdings of securities have declined since they reached their peak in April 2013, at around $1.3 trillion. Even allowing for the slop of incomplete reporting and the routing of some transactions through the Cayman Islands, there is no picture of heightened Chinese enthusiasm for placing their forex holdings in US Treasuries. 
As the Western and Chinese financial press have reported ad nauseum, the PRC plows its money into US Treasuries, not as a vote of confidence in American fiscal management and economic vitality but simply because a viable alternative hasnít yet emerged.
At the same time, of course, China is entering into currency swap agreements with many of its non-US trading partners (200 billion yuan with the UK, 350 billion yuan with the EU) to take the US dollar out of the equation and establish a basis for foreign holding of the yuan - and reduce the trade surplus-related increase in the PRCís gigantic US dollar reserves.
In an unintended consequence of US sanctions, China has also been able to exploit Iranís predicament by paying for some energy imports with yuan instead of with US dollars. It is also buying gold and scouting the world for reasonably plausible non-Treasury debt, equity, and resource plays for its forex.
As to where this is all going, I expect that Chinaís high-profile demands that the United States get its house in order represent a planned one-two propaganda punch as the US phases out quantitative easing 2 and the PRC presents itself to the Asian democracies as a counterpoint to the US - a stable, responsible, and well-heeled practitioner of the arts of fiscal management and international finance - and the best-qualified partner for bilateral trade and multilateral regional finance and trade agreements, including the $100 billion BRICS rescue fund for emerging markets that China is pushing as an alternative to the IMF.
Itís going to take more than misdirection, mockery, and indignant bluster in the US media to turn that situation around.