Following the Chinese economy, the Yuan is increasingly increasing its significance in the world. Let's see what factors determine the global outlook for the PRC currency.
Correct currency name
Yuan - the so-called Chinese money in the world.The name, however, does not quite correspond to the sound of the national currency in the PRC itself. At home, Chinese banknotes are called none other than "renminbi" (in translation - "people's money"). And the yuan is only a noun meaning cash in principle. But the brevity and harmoniousness of this Chinese word was to the taste of the rest, above all the Western world.
In ISO standards, the official currency designation isCNY. One yuan ("renminbi") is equal to one hundred fenyam (their name is the same in China and the rest of the world is the same). In turn, "pennies" can be combined into a jio - ten times the larger equivalent (like "daimyas" in the US). So, PRC money is classified as follows: 1 yuan equals 10 jao, which is identical to 10 fan. However, in practice, it is difficult to find a “penny” in Chinese stores, since they are withdrawn from circulation. The most common monetary coins in one or five jos. Also in the "metal" there are single yuan.
Yuan history
The history of monetary circulation in China countsseveral thousand years. Hieroglyphs denoting the words "product", "purchase", sale "," exchange "and associated with them within the meaning, are in sources that reflect the times of deep antiquity. The first money in our usual sense appeared in the state in the 5th century BC. e. First, in the form of bronze bars (or in the form of the simplest household items - shovels, a knife), then Chinese coins appeared.
Money in the period corresponding to the EuropeanIn the Middle Ages, along with copper samples, iron and lead formats were added, as well as paper bills. Over time, Chinese money has undergone "silver" standardization, and in the early twentieth century - the "gold". When the communists came to power, the People's Bank of China was created. All the money that the population had in circulation was subject to withdrawal and exchange for renminbi - new Chinese money, the very same “people's bank notes”. The issue of new currency has become strictly controlled by the state.
Exchange rate policy
Until 1974, the RMB exchange rate was trading asusually with a reference to the pound sterling, but then the quotes began to be applied to the US dollar. In 1994, the government of the country initiated the freezing of the yuan against the American banknote in the ratio of 8.27 RMB to 1 “bucks”, which lasted 11 years. This caused discontent among some of China’s trading partners, including the United States. The Chinese authorities have come under pressure to liberalize monetary policy, since, according to representatives of other countries, because of the low exchange rate of the yuan, China has benefited from purchasing power. This state of affairs was partially confirmed by figures: the negative balance of the US trade balance with China in 2004 exceeded $ 160 billion, and in 2005 its increase continued. But in the same year, the PRC government abolished the “freezing” of the course. True, as some experts note, from that moment the yuan was still not allowed to float freely, and its course could be artificially undervalued.
Yuan and Ruble
Close economic cooperation between Russiaand China every year is more and more impressive. Chinese money, their name and pronunciation features are not new to the Russian Federation. Moscow and Beijing are organizing joint work in many global areas, so cooperation in the field of currency regulation plays an important role in trade cooperation between the two countries. Now the ruble and the Chinese money claim to be hypothetical inclusion in the list of reserve currencies, but so far this does not happen in practice.
In recent years, there has been a trend - the settlementnot in dollars or pounds, but in national banknotes. In 2010, the ruble began to bargain on the Shanghai Stock Exchange, and the yuan, in turn, - on the MICEX and RTS. National regulators have different bidding principles. The Central Bank of the People's Republic of China has a hard limit on fluctuations of the yuan exchange rate on the exchange within 0.5%. The Bank of Russia, as a rule, influences trading using currency interventions. Among yuan traders, there is a growing interest; there are thematic portals where you can quickly transfer Chinese money to Russian at the current rate.
The prospect of investing in yuan
Many experts believe that the yuanrelative to world currencies is undervalued, so it makes sense to invest in a Chinese banknote with the expectation that it will rise in the foreseeable future. As the practice of currency trading shows, the yuan, if growing, is not as fast as investors would like. For example, with respect to the ruble, experts say, the renminbi has recently shown an average annual growth of about 8%.
About the same benefits can bring ordinaryBank deposit. Financiers recommend investing in yuan only in some cases. First, it is advisable for regular trips to the PRC. Secondly, the yuan can be considered as a “reserve” currency to diversify the investment portfolio. Third, deposits in the yuan on the terms of Russian banks may well interest the Chinese themselves, who come to Russia for tourism or business.
Yuan and dollar
The relationship of the yuan and the main world currencyobviously depend on how things will develop in the friendship between the countries issuing this money. One of the factors - the People's Republic of China keeps the bulk of its financial reserves in dollars. Much depends on whether the Chinese will continue to hold foreign exchange reserves within the framework of the existing structure or will prefer to diversify the portfolio. The head of the Central Bank of the People's Republic of China voiced this idea at the official level - that the country's reserves cannot consist only of US dollars. In the press, there is information that China is going to sell about 2 trillion "bucks" of the available 3.04 trillion in favor of transferring to other assets not related to the American "green". Some experts believe that the Chinese authorities are only trying to bargain preferential terms for the yuan and turn Chinese money into a reserve currency on a par with the dollar.
Yuan as a world currency
The intention of the government of the PRC to make the yuan one ofleading world currencies, experts believe, may have a fundamental basis. Some financial analysts expect that in the next few years, the share of China’s foreign trade settlements with other countries in yuan may exceed 30%. The evolution of this figure is impressive: now it is close to 20%, while four years ago it was 3%.
В первые месяцы 2014 года женьминьби по подсчетам Financiers took the 7th place in the list of the most popular currencies in the world, overtaking, in particular, the Swiss franc. The investment value of the yuan is growing as China becomes more open to global markets. Recently, a joint project of the banks of England and the People's Republic of China appeared in London - a settlement center for organizing work with the yuan. Experts expect that Chinese money will become a noticeable currency at the global level, but it’s not at all the fact that they will replace the dollar.
Yuan outside the PRC
The currency of the PRC is becoming increasingly active.used in trading stocks, bonds and as other financial instruments. This direction will be developed the more intensively, the sooner the yuan can become a convertible currency. Renminbi mastered in other countries of the “Chinese” profile: Hong Kong (where the share of deposits in the PRC currency reached 12%, while in 2008 it was only 1%), Taiwan, and Singapore. In the last two countries, there are offshore trading centers in RMB. Recently, the People's Bank of China and the Central Bank of Germany concluded an agreement on settlements in the currency of the PRC.
The political significance of the yuan
China is recognized by many experts as the mainengine of the world economy. Now China produces, depending on the basis of calculation, 10-15% of the planet's GDP. The expansion of the economic influence of the PRC, and hence the influence on political processes, is directly dependent on the monetary policy of the government. Financiers believe that the prospects for this area depend on three factors.
- First, it is internationalization - the use of currency as a tool for expressing value and conducting settlements in international financial transactions.
- Secondly, it is convertibility - the degree of restriction of capital flows and outflows.
- Thirdly, this is the use of foreign banks as a reserve currency.
The prospects of the yuan as an instrument of political influence depend on how the PRC government combines the priorities in these areas.
