China’s Big Currency Strategy

China’s growing success in internationalizing the RMB has both political and economic implications.

A Bank of International Settlements survey released on September 5 reveals that the renminbi (RMB) is now among the 10 most actively traded currencies in the world. This comes on the back of China’s recent draft plans to allow full convertibility of the RMB within the newly approved Shanghai Free Trade Zone (FTZ). Both events are intricately linked and are linked to deeper plans by the Chinese government to both internationalize the RMB and consolidate its influence and standing in global financial markets. This suggests that China’s global integration is no longer limited to trade, but is fast spilling over into the realm of finance.