Yuan’s overseas status rising, but nowhere near China’s economic ‘heft’: ex-official

Beijing’s push for the internationalisation of the Chinese yuan is not a plot to dethrone the US dollar’s dominance in worldwide trade and government reserves, or to establish financial hegemony, a prominent former senior official said on Thursday.

It is instead aimed at supporting global supply chain stability, Huang Qifan, the former mayor of the western megacity of Chongqing, told the Bund Summit in Shanghai on Thursday.

Calling increased use of the yuan as something inevitable as the Chinese economy further opens up, Huang noted that conditions would be ripe for the opening up of China’s capital account when the yuan’s global share matches that of the world’s second-largest economy.

Huang, known for his often outspoken insights on the economy and financial markets, expected the yuan’s share in international payments and settlements to edge up by 1 percentage point per year over the next decade to eventually reach parity with the euro.

“The yuan’s status abroad is rising, but it’s still nowhere near the global predominance befitting China’s economic and trade heft,” said the politician, who previously oversaw economic and financial development in Shanghai.