The Ultimate Crony Capitalist State, China, has seen some challenges as of late. It’s economy is trending down. It’s brand new shipping facility in Tianjin blew up in spectacular fashion. The “Chinese Miracle” has taken a real hit in the eyes of the world.
But that the IMF is letting the Chinese currency into the exclusive club of currencies with “special drawing rights” is a coup. Technically the yuan will soon have the same status in terms of international business as the pound, the euro, the yen, and the dollar.
Though the dollar remains King Dollar, it is looking increasingly less “almighty.” The yuan is also the currency of a generally rising power which stands in contrast to the pound, yen, euro, and to some degree the greenback.
(From The Guardian)
Beijing has long hoped the yuan would be added to the small list of currencies in which member-countries’ claims on the IMF are denominated. Experts say a vote to include the yuan in the SDR would be a big political victory for China.
China hopes this stamp of approval will increase the yuan’s desirability as a reserve currency for investors and undermine the hegemony of the dollar as a global reserve currency.