Recently, there have been several reports in the media about movesaimed at promoting the use of the yuan as an internationalcurrency. In the middle of last month, for example, HSBC announcedthat it was planning to issue yuan-denominated bonds in London.Also, last week, it was reported that the People's Bank of Chinahad signed an agreement with the World Bank Group (WBG) to investin China's inter-bank bond market on behalf of two WBG agencies. These moves though, which focus on the development of theyuan-denominated bond market, will do little to push the yuan ontothe global stage. The main problem facing the yuan is that it stillfails to function as a measure of the value of commodities. Generally, a currency achieves global prominence once it is used inthe valuation and settlement of commodities, especially importantenergy resources. Both the pound and the US dollar, the world'sformer and current key currencies, experienced such a progression.In the 19th century, the world's main energy source, coal, waspriced in the pound; while in the 20th century, the US dollarprevailed in the settlement of crude oil. The US dollar also dominates the pricing of many of the world'smost widely-traded commodities, including metals and agricultureproducts. As long as the US dollar continues to hold sway over thesettlement of vital commodities, it has the power to influenceChina's economy, especially as the country becomes more dependenton imported energy resources. In the past decade, China's demand for commodities has grownenormously. According to a recent research report from GreatwallStrategy Consultants, China is the world's largest consumer of 19of the 25 commodities in tracks. It is estimated that by 2030,China will have to rely on imports to meet 70 percent of itspetroleum needs and 50 percent of its natural gas needs, accordingto the Report on China's Energy Development for 2011, compiled andedited by Liu Tienan, director of National Energy Administration. As demand grows, a depreciating dollar will push up the price ofimported commodities for China. Actually, there is evidence thatthis process has already begun with some commodities. In 2011, forexample, China paid 45.3 percent more compared with the year beforeto import only 6 percent more petroleum. To make its currency more independent and more internationallyrelevant, China has to step up the use of the yuan in the globalcommodities market. I suggest the government push for yuan settlement and pricing incommodities trading with Africa, the Middle East and theAssociation of Southeast Asian Nations in order to graduallypromote the internationalization of its currency. I am an expert from continuous-castingmachine.com, while we provides the quality product, such as China Cast Billets , Continuous Casting Machine for Steel Manufacturer, Billet Continuous Casting Machine,and more.
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