It is a matter of time before the Yuan emerges as a major world currency on par with even the US dollar, opines Shan Saeed.
Standing in New York on Jan 7, 2011, I was talking about Yuan currency for the emerging markets. Two hundred plus investors sitting in the audience at Intercontinental Hotel were laughing at me. After 4 years, time has proven who made the right call. IMF made the major move of putting Yuan in SDR on Nov 30, 2015. According to the Economist magazine (Jan 16, 2016 issue): “China’s economy is not on the verge of collapse. It is likely to be close to 7%. That figure may be an overestimate, but it is not entirely divorced from reality. Nevertheless, demand is slowing, inflation is uncomfortably low and debts are rising. The bullish case for China depends partly upon the belief that the government can always lean against the slowdown by stimulating consumption and investment with looser monetary policy—just as in any normal economy.”
China has the second largest refining capacity of nearly 14 million barrels of oil a day, trailing only the US’ total of just under 18 million barrels. Again, China is projected to forge ahead in 2016. This is just one of the many ways in which China matters.
Rules of engagement are changing. Will USA get isolated in the global energy market from the new bloc being created i.e. Russia, China, Brazil, Saudi Arabia, Germany and Iran? It remains to be seen how the US will cope with the formidable bloc with strong economic and GDP growth moving forward in the energy market. On Oct 7, 2016, the IMF meeting in Washington is very likely to make an announcement on yuan making it the new monetary order for the global financial markets. (Source: Jim Rickard report: Sept 2016 -Strategic Market Intelligence)
The Yuan has been trading with almost 97 countries globally in trade, energy, guarantee payment, L/C agreement. Some of the countries and central banks have bought Chinese debt for their reserves. Many global investors are feeling positive about the yuan to be active and acceptable for trading purposes in the global financial markets. Happy investing in Chinese yuan.