The Association of Southeast Asian Nations (ASEAN) has surpassed the European Union and the United States to become China’s largest trading partner. With all eyes on President Xi Jinping’s presence, or otherwise, at the Bangkok summit, how does Beijing hope to promote the use of the Chinese yuan overseas?
China started its ambitious yuan internationalisation plan in 2009, expanding it via its Belt and Road Initiative. Financial markets were opened to foreign investors. China now wants to establish yuan settlement with neighbouring countries and to develop offshore centres, putting aside any real challenge to US dollar hegemony, at least for now.
According to today’s South China Morning Post, aggressive interest rate hikes by the US Federal Reserve Bank this year have weighed heavily on China in terms of capital outflows, underlining the monetary policy gap…
