The Chinese government is planning to turn the Chinese Yuan into a global reserve currency in order to make the national economy more open to the rest of the world. This was confirmed by the People’s Bank of China.
The governor of the central bank reminds us that Beijing started to gradually open the Chinese markets to foreign investors in the late 1980s – early 1990s when China was getting ready to enter the WTO. However, later on, those processes slowed down because of the Asian financial crisis in the late 1990s and the global crisis in 2008-2009.
Nevertheless, Beijinghasbeenopeningforeignofficesabroadandinvitingforeignfinancialcompanieseversince. This is done to improve the competition in the domestic markets.
When it comes to the policy based on openness, the key role is played by the internationalization of the Chinese Yuan (also known as the Renminbi). The central bank took enough steps to make the Renminbi a perfect fit for trading and investing. On top of that, it was added to the SDR basket, which is a big step for the Chinese national currency.
Previously, the Chinese Minister of Foreign Affairs already mentioned the government’s plans to open wide the access to the local markets. In particular, he promised to ease the restrictions on foreign investments and international trade to let China integrate deeper into the global economy.
