It’s Opportune time for China to Liberalise Currency
It’s Opportune time for China to Liberalise Currency By Current Affairs Correspondent East Asia for Belt and Road News
The spread of the merciless coronavirus throughout the world is worsening, but China is reporting less and less infections, including in the virus’ epicenter, Wuhan, Central China’s Hubei Province.
This seems to offer the policymakers in Beijing an opportune time to liberalise capital flow controls in order to conduit more investments from abroad to fire up China’s sputtering economic engine.
And, by making China’s yuan availability easier to worldwide investors, the currency is more likely to become a global reserve tender at an earlier date, which will help the country and the world a lot. And now is the “time window.”
If the yuan is freely convertible and becomes a broadly used major reserve currency – the same as the US dollar, the EU’s euro and the Japanese yen, China’s economy will regain its righteous place as the world’s second largest economy, and will be less susceptible to the US government’s hegemonic power play as well as its erratic and abusive tariffs war.
A freely convertible and strengthening currency will help China align more closely with ASEAN (Association of Southeast Asian Nations) economies and all of China’s neighbours, and propel signing of the Regional Comprehensive Economic Partnership (RCEP), a massive free trade deal for the emerging region.
It will also significantly accelerate implementation of the Belt & Road Initiative (BRI), as China’s vast enterprises, armed with a reserve currency, could easily make use of global resources, and settle transactions with BRI partners more expediently.
Now thanks to the Trump administration’s problematic and often bungled prevention measures, the US’ eastern and western coasts are both enveloped in an inflaming COVID-19 epidemic, and, consequentially, the US stock and bond market are embroiled in breath-taking volatility and turmoil.
The stability of the US dollar, the treasuries and other US assets are entering a completely unchartered territory now. The US Federal Reserve’s rash attempt of cutting the interest rate by half a percentage point has failed to stop the US market rout.
It is high time for China’s yuan to take the stage, and become a bellwether leading the world’s economy out of its doldrums and back to stability.