Will The Yuan Eventually Replace The US Dollar?

As for the renminbi, maybe it will never take it.

A country wants its own.

When corruption is rampant and the gap between the rich and the poor is increasing, social instability is still a real threat to a country without democracy.

If the central banks of other countries want to hold Renminbi for a long time, they must believe that Beijing will establish a political system so that the country can have a stable and foreseeable future.

So the question of the future of the renminbi will largely depend on the larger question of when China will hold free elections.

But it is clear that in the wake of criticism that Beijing intervened in the foreign exchange market, China is building a foundation for the wider acceptance of the renminbi.

Since July 2009, 20 years ago, China's export enterprises have begun to settle trade with Renminbi.

China's imports settled in RMB still account for less than 1% of its total imports, but according to a research report by Standard Chartered Bank in London, this proportion is expected to expand to 20% in 2015.

China is developing Hongkong as an offshore trading and Investment Center for RMB and RMB financial products.

The key measures taken so far are already creating markets for Renminbi currency pactions and creating a so-called "dim sum bond" market.

The dim sum bond market deals with Renminbi denominated bonds issued by foreign companies and bonds issued by Chinese companies.

The two markets have seen strong growth in recent months, reflecting optimism about China's economic prospects and the mentality of continuing to bullish the renminbi.

Beijing has recently allowed Bank of China, a large state-owned bank, to open renminbi pactions to us customers, which is seen as a symbolic move by the government to support offshore pactions.

These are important steps.

But experts believe that China needs further efforts to persuade domestic and foreign companies to settle trade in Renminbi, and to encourage the Central Bank of the world to hold renminbi assets in its foreign exchange reserves.

The key point will be to improve the efficiency of foreign exchange supervision and create more ways for overseas RMB to invest in China.

Green Patrick Perret-Green, head of foreign exchange and local market strategy at Citigroup Inc. in Singapore, said that an important step in improving the convertibility of the renminbi would be to further open the domestic bond market for foreign investors.

In August last year, Beijing allowed a small number of foreign investors to enter its huge and potentially profitable domestic interbank bond market, but imposed a strict quota system.

In addition, China is considering allowing Hongkong's RMB funds to invest in the mainland stock market.

The Shanghai stock exchange also has a plan to allow foreign companies to issue Renminbi shares.