Xi Jinping, General Secretary of the Communist Party of China, President of the People’s Republic of China, and Chairman of the Central Military Commission.
When Xi consolidates his rule throughout the Party Congress this November 18, we should expect him to appoint a new Central Bank chair. The success of Zhou Xiaochan, China’s current monetary authority will be a difficult act to follow. Xiaochan was responsible for eliminating China’s dollar peg, modernized Beijing’s monetary policy tools, ended caps on deposit rates and engineered the yuan’s elevation as a reserve currency asset. What could go wrong going forward?
To begin with, Asia only denominates about 2% of its transactions in yuan. This has strong geopolitical implications evidenced throughout China’s posture in its southern littoral. Until nations across Asia begin trusting China’s foreign policy posture, this will definitively halt Beijing’s progress toward possessing reserve currency status.
Recently, China’s central banking authorities have stepped up control over the yuan’s rise prodding Asian companies throughout Asia that have been hoarding dollars to convert them into yuan. Any surge in yuan denominated deposits should be met with skepticism, until after the Party Congress.
China’s …read more
Source:: Affluent Investor.com