The launch ceremony of Renminbi Sovereign Bonds in Hong Kong, September 28, 2009. Credit: Kin Cheung via AP
It’s been 13 years since China first started promoting the international use of its currency, but the effort has fallen wildly short of expectations. The yuan is still used far less in global transactions than the dollar and euro, and even lags the British pound and Japanese yen.
However, the need to foster global acceptance of the yuan – and decouple the Chinese economy from the dollar-dominated global financial system – has assumed unprecedented urgency in Beijing. Chinese leaders view the country’s exposure to the dollar both as a strategic vulnerability and as a barrier to realizing its Great Power ambitions.
In a widely overlooked shift, Beijing has already started overhauling its approach to RMB internationalization in recent years. Its previous efforts focused on creating ways for foreigners to use the yuan: Now policy makers are intent on giving them a reason to do so.
There’s no guarantee that Beijing’s new approach will be enough to trans
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