Will The Yuan Threaten The Status Of The US Dollar?

The annual report released by the US-China Economic and Security Review Commission on Wednesday said that Beijing's efforts to promote the internationalization of RMB are expanding the RMB's territory successfully.

"One thing is no longer unthinkable, that is, the renminbi may pose a challenge to the US dollar, perhaps in the next 5 to 10 years," the committee, chaired by William Lai Yinshi (William Reinsch), said.

Lai Yinshi is also a business group.

"The establishment of a series of bilateral arrangements with foreign enterprises and financial centres by China's financial authorities is laying the foundation for this ambition."

The report also said that China is continuing to intervene heavily in the domestic economy, including means of providing subsidies and protection to state-owned enterprises, forcing foreign investors to pfer technology rules, and opening government procurement to Chinese enterprises (the so-called "independent innovation" policy).

"Chinese officials (including President Hu Jintao) have promised to revise China's policy of independent innovation," according to a protest against business leaders and senior officials in the United States.

"However, these commitments have not yet been fulfilled at the provincial and provincial levels."

In recent years, Beijing has gradually relaxed the control of RMB for international pactions and conducted pilot projects in Hongkong.

Chinese authorities are still heavily in control of cross-border capital flows, while continuing to intervene heavily in the foreign exchange market to lower the RMB exchange rate.

The Peterson Institute for International Economics (Pedersen for) estimates the undervaluation of the exchange rate, often cited by the US Congress as authoritative data.

The think-tank said this week that due to the slight appreciation of the renminbi and the rise in China's inflation rate, the current RMB's undervaluation relative to China's main trading partner currencies is only 11%, down from 16% in April this year.

But according to the Institute, it is estimated that the RMB will still be undervalued by 24% relative to the US dollar under the basic equilibrium exchange rate (FEER) - the normal output of the economy.

Senior officials of the Obama administration, including US trade representative Ron Kirk and Minister of Commerce John Bryson (John Bryson), will go to China to attend the Sino US Joint Commission on commerce and trade (JCCT) meeting this weekend. This is the main forum for bilateral negotiations between the two governments on related matters. (Kirk John)

China has committed to submit the application of the revised Government Procurement Agreement (GPA) by the end of the year, which is an agreement within the World Trade Organization (WTO), which aims to allow public sector contracts to accept international bidding.

In Washington, the issue of RMB has once again become the most important topic on the political agenda.

In October, the US Senate passed a bill allowing the United States to impose retaliatory tariffs on Chinese exports to the United States based on the estimated undervaluation of the exchange rate.

But in the house of Representatives, the Republican leadership who opposed this measure has so far refused to allow similar legislation to enter the voting process.