Monday, 25 September 2023 12:39 GMT

Ukraine War Gives China's Yuan A Needed Boost

(MENAFN- Asia Times) The Chinese economy's sheer size and rapid growth are impressive.

China maintained one of the highest economic growth rates in the world for more than a quarter of a century, helping lift over 800 million people out of poverty in just a few decades.

The country is the largest exporter in the world and the most important trading partner of Japan, Germany, Brazil and many other countries. It has the second-largest economy , after the United States, based on the market exchange rate – and the largest of all based on purchasing power .

And yet the yuan still lags as a major global currency. The war in Ukraine, which started in February 2022, may change that.

As a professor of finance and expert on international finance , I understand how this geopolitical conflict may put China's currency on the next phase of its path to becoming a global currency – and prompt the onset of the decline of thedollar from its current dominance .

Chinese yuan's slow progress

China has long wanted to make the yuan a global force and has mounted significant efforts to do so in recent years.

For example, the Chinese government launched the Cross-Border Interbank Payments System , or CIPS, in 2015 to facilitate cross-border payments in yuan. Three years later, in 2018, it launched the world's first yuan-denominated crude oil futures contracts to allow exporters to sell oil in yuan.


Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.