Chinese Yuan Surpasses Euro
It’s all about the Mao’s!
China is now the home of the second most used currency in global trade. The yuan (or renminbi) has overtaken the Euro to place second behind the US dollar. According to SWIFT, the Belgian financial communication system, the dollar still holds 81.08% of letters of credit and collections, but the yuan makes up 8.66% as of October 2013. This pushes the Euro to third place, followed by the Japanese Yen.
This news comes after a few months of China’s opening of the pilot free trade zone in Shanghai. China is said to be pushing for the renminbi to have much larger role in global trade and financial investments. For foreign companies and investors doing business in China, the use of Chinese yuan gives you an advantage due to convenience you are providing for your Chinese counterparts. The yuan has also appreciated 2.3% against the dollar this year, so it’s apparent that the tides are shifting for the yuan’s favor.
So what should you do with all of this information? Hone your Chinese, get acquainted with the yuan, and invest Asia’s leading currency. For those of you that are a little more adventurous, buy a plane ticket and see what you can learn about the Chinese financial market.