Xi Jinping has laid out an explicit goal for China’s currency, urging that the renminbi evolve into a widely used international unit that can eventually be held as a reserve currency.
In an essay published Saturday in Qiushi, the Chinese leader argued that China should build a “strong” currency that is broadly used across global trade, investment and foreign exchange markets and that can ultimately be held by central banks as reserves.
Beijing has spent years promoting wider international use of the renminbi. The article is notable because it sets out a clearer definition of what that ambition requires. Xi pointed to the need for a more capable People's Bank of China, globally competitive financial institutions, and financial centers with enough depth to attract overseas capital and influence price-setting in global markets.
The comments were drawn from a 2024 address to senior regional officials and had not been made public until this week.
Their release comes as global investors and central banks reassess the dollar’s dominance amid market volatility, policy uncertainty and geopolitical strains. Donald Trump has recently welcomed a softer dollar, while speculation about leadership changes at the Federal Reserve and trade frictions have added to the debate about currency exposure.
Some economists see Beijing trying to capitalize on a shifting backdrop in the global order. China’s central bank governor, Pan Gongsheng, has also spoken about a future system where several major currencies share influence, the Financial Times reported.
Even so, the renminbi’s role in official reserves remains small. The International Monetary Fund data show the U.S. dollar still makes up the largest share of global reserves, with the euro second. The renminbi ranks well behind, at under 2% in the third quarter of 2025.
Analysts say a bigger reserve role would likely require steps China has been cautious about, including a more open capital account and fuller convertibility. Trading partners have also urged Beijing to allow a stronger exchange rate, arguing the currency is kept too weak and contributes to China’s outsized trade surplus.
Chinese officials, including PBOC vice-governor Zou Lan, have said China does not intend to use a weaker currency to gain an export edge.
Policymakers have recently tolerated modest strengthening against the dollar, though the currency has been softer versus the euro. Market watchers say Beijing’s near-term focus is stability, while longer-term appreciation would depend on stronger domestic growth and continued progress in strategic technologies, the FT reported.
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.