Top Chinese banker calls for wider use of yuan

[Groenewolf]

The head of China's second-largest bank has said the United States government should start issuing bonds in yuan, rather than dollars, in the latest indication of the increasing importance of the Chinese currency. Guo Shuqing (pictured left), the chairman of state-controlled China Construction Bank (CCB), also said he is exploring the possibility of issuing loans to trading companies in yuan, allowing Chinese and foreign companies to settle their bills in yuan rather than in dollars. Mr. Guo said the issuing of yuan bonds in Hong Kong and Shanghai would help to develop the debt markets in China and promote the yuan as a major international currency. It was the first time the head of a major Chinese bank has called for the wider use of the yuan, although a chorus of senior government officials have already voiced their concerns about the stability of the dollar and have said the yuan should be used more widely. "I think the US government and the World Bank can consider the issuing of renminbi bonds," he said, asking for a "mutual cooperation" between the US and China to promote Chinese financial services. He said bond issuance could be relatively small, at between 1bn and 3bn yuan (£100m to £300m). - UK Telegraph

[Cato]

As the U.S. dollar tanks, people are looking for an alternative. I can't say that I'm surprised, given that China's economy has been booming in just about every area over the past few years. However, what's stable today can tank tomorrow, so the idea of using the yuan is as risky as continuing to use the greenback. This is just my own, personal opinion- an economist, which I'm not, would be able to give you the pros and cons of using the yuan. I just see it as more international monetary flim-flammery. Essentially, it's all about virtual currency, or paper money that can be printed on demand- whereas I prefer the idea of a solid currency. Hence, my idea that gold, silver and so forth, even in a debased form, are better staples for an economy that paper and credit that can be conjured out of thin are by piratical bankers and their political whores.