China's Quest for Currency Power
Alan Wheatley, Global Economics Correspondent, Reuters News (2011-13); Freelance Economics Writer
Geoffrey Yu, FX Strategist, UBS Limited
Chair: Paola Subacchi, Research Director, International Economics, Chatham House
The US derives significant geopolitical power by issuing the dominant reserve currency. Not surprisingly, China would like to wield similar power and is successfully promoting the use of the renminbi to settle trade. The speaker will argue that the RMB’s chances of becoming a major reserve currency are poor, as financial liberalization, although a necessary condition, is insufficient. China must also earn the unquestioning trust of global money managers. History suggests this takes decades even for a rules-bound democracy, let alone an opaque, unpredictable single-party state.