The Internationalization Of The Chinese Yuan Term Paper Samples

Since 改革開放 in 1978, the Chinese economy has seen rapid Economic in China has been developmented rapidly. The Chinese Yuan’s growth could It would threaten the international presence supremacy of the American dollar;, and likewise the Japanese government is also worriesd about the economic impact of the by expansion of the Chinese Yuan in recent years. With the expansion of China’s economyTherefore, the Chinese Yuan’s becoming one of the world’s currencies it would not be surprising.ed if Chinese Yuan became one of the world currencies. This paper explores is the investigation of potential in Chinese Yuanrem’s (Rremnibi) potential presence in the global market.
There are mainly five primary reasons whythe Chinese Yuan cwould become one of the world currencies. First, one the is that Yuan is already one of the main currencies employed in the of settlement ofin cross-border transactions, as you see the data shows that more than over 1000 banks in 85 countries have made Yuan transfers via the s transfered Yuan over Society for Worldwide Interbank Financial Telecommunication (AfricaRenewal, 2014).
Secondly, the groundwork has been laid via the development of an exchange one is developed exchange rate system among between the Yuan and a lot of many foreign currencies. PAt presently, foreign currencies , which are exchangeable with the Yuan, includeare the U.S dollar, the Euro, Great Britain’s Pound, the Malaysian Ringgit, the Russian Ruble, AzerbaijanAZ dollars, the Canadian dollar, and the Japanese Yen. In addition to these nine9 currencies, other legal tender currencies such as the Korean Won, Thai Baht, and Vietnamese Dong are also exchangeableacceptable. (Okubo, 2014) Therefore, for Chinese companies As, the more acceptable Yuan becomes more accepted, Chinese companies experience greater ease in doing , the easier for them to do their business withbecause there is lower risk whenin dealing with the exchange rate. Although theEven if U.S. dollars presently would be remains the strongest world currency at present, Chinese firms and or the Chinese government are no longer must getting exchange their currencies to U.S dollars in many transactions, with now and this trend expected to increase even more in the future.
Thirdly, mMany countries announced that they have added the Yuan to their international reserve currencies. Central banks in Korea, Belarus, the Philippines, Malaysia, Thailand, Cambodia, and Russia have placed chosen the Yuan as a means of storinge of value.
Even if the internationalization of the Yuan are is greatly developing strongly, the status is still immature compared to the U.S dollar, Euro and Japanese Yen on present showing. Many There are also many obstacles face for the Yuan’s internationalization. For example, Japanese economist, Naoto Saito, a Economist in Yamato Soken arguesstated this “golden opportunity for China” is just simply a temporary phenomenon caused by the because of global financial crisis which led to a then high demand of for the Yuan by countries around ChinaAsian countries . (Saito,p.4, 2014, p. 4). However, Japan oughthas to take advantage of this great Chinese opportunity. of China because if As transactions between China and Japan gets become more active frequent, There are many merits for Japanese companies will benefit by seeing too such as lower transaction costs and a favorable in transaction and exchange rate, and will see an expansion in the level of Yen transactions. expand of needs in yen. Therefore, the Japanese government need should not be worried worry thatabout the internationalization of the Yuan will lower and it lowers the value and prestigestatus of the Yen, but should understand how the phenomenon leads to the increased internationalization of the Japanese Yyen.

References

Mukeredzi, Tonderayi (August 2014). Chinese yuan penetrates African markets
Could it be the next global reserve currency?, Africa Renewal. Retrieved from
http://www.un.org/africarenewal/magazine/august-2014/chinese-yuan-penetrates-
african-markets
Okubo, M http://www.21ccs.jp/Jinmingen/jinmingen49.html Author, A. A., & Author, B. B.
(Date of publication). Title of article. Title of Online Periodical, volume
http://www.someaddress.com/full/url/
Saito, N http://www.dir.co.jp/publicity/magazine/pdf/14021001.pdf Author, A. A., & Author, B. B.
(Date of publication). Title of article. Title of Online Periodical, volume
http://www.someaddress.com/full/url/
AfricaRenewal
http://www.un.org/africarenewal/magazine/august-2014/chinese-yuan-penetrates-african-markets