The Internationalization Of The Chinese Yuan Will Impact The Export, Import and International Trade

Dec. 27, 2011 - PRLog -- The Internationalization Of The Chinese Yuan Will Impact The Export, Import and  International Trade



China and Japan have decided to use the yuan for their trade while the yuan is a non convertible currency and  Hong Kong wants to be the hub.



The renminbi - the "people's currency", official name of the yuan - is still not convertible. It is the Central Bank of Beijing who establishes each day the reference rate in the limit of a variation which does not exceed 0.5%.



Six and a half years after the retrocession of Hong Kong to China, yuan transactions have been authorized in the territory to facilitate tourism with the Mainland. In July 2007, the first bond emissions  have been issued. In July 2009 the real agreement took place legalizing the business transactions in yuan between Beijing and Hong­kong.


As a result, the value of deposits in banks in Hong Kong which did not exceed 12.1 billion yuan (1.47 billion euros) in late 2004, has exploded to 609 billion yuan in August 2010. The yuan now comes in third position behind the US dollar and the Hong­kong dollar. The overall value of contracts issued  in the Chinese currency in Hong­kong today reaches 1500 billion yuan (181.3 billion euros). These changes have an impact on the competitive business intelligence.


Last year and  for the first time, foreign companies (McDonald's, Caterpillar, Air liquide, the World Bank, the Asian Development Bank have issued their first bonds in Yuan. And now, China and Japan agreed to increase trade in their respective currencies, the renminbi and the yen instead of the dollar. Tokyo will also purchase as early as 2012  yuan-denominated bonds.


Hong Kong which is the experimental  field of Chinese currency internationalization takes advantage from that situation .

For the last ten years and in addition with the crises in Europe and the United States, the centre of gravity of the economy slips to Asia. Its share in the world  gross domestic product (GDP) increased from 20.6% in 2000 to 23.7% in 2009 - and 3.7% to 7% for China-when it decreased from 33.7% to 30.6% for Europe and from 28.3% to 26.7% for the United States. In 2000, not more than 15% of companies in Hong­kong were Chinese. Ten years later, they were 42% "and their value rose from 27 to 57% of the total market capitalization of Hong Kong.


China multiplied agreements with Macao, Asean (Association of Southeast Asian nations), Russia, Australia, Canada, and soon Singapore which sounds like an irreversible movement. These changes in transactions can be viewed thru Customs import data, export data, bill of lading, exporters and importer directories and international trade information.

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