人民币地位能超越美元?

-You’ve been doing quite a lot of research on this, and one of that your conclusions is that we could be on the verge of a financial revolution of truly epic proportions, talking about the yuan. What do you mean by this revolution?

-OK. Well, first of all, there’s been a lot of talk about the potential twilight area for the USD as a reserve currency. Although, this, the red, for the rise, the redback has been captured as a, as a…

- Kwok, they said if you look at what the redback’s doing, it’s becoming more popular. But it’s not gonna become a reserve currency any time soon, is it?

-Not any time soon, though. By epic proportions, we are talking about a multi-decade process.

-Right.

-We are talking about at least until in 20 years’ time before the redback can become a serious contender for the US. As a reserve currency, it needs to become fully convertible.

-Mainly it floats freely.

-Exactly. You can buy and sell it freely at the international markets. That’s not going to be possible at least until 2020. Before that happens, we need the renminbi to start to be used freely as a trading currency and also as an investment currency outside of China.

-Now we start to see that.

-Yes.

-Right.

-So is this the Chinese strategy then to actually start nudging them to prepare the ground if you like to nudge the US dollar aside. Why does it want to do that?

-You could see it in that way, but in another way I’m looking at, it would be the fact China’s global economic presence is immense, but the presence of the yuan as a global currency is next to nothing. It’s trying to close this gap and align the mismatch. And it wants to be able to free the use of renminbi in its own transactions and allow its exporters to actually deal and trade in its own currency. Never before in history has another economy that was the largest trader and the second biggest economy had to use another country’s currency to settle its trades.

-Now, at the moment, we are obviously seeing China resisting all attempts to see a significant appreciation of the yuan. Yet you are saying within eight years, it’ll be fully floating at the mercy of the market. That sounds quite quick, particularly if we look at in terms of Chinese sort of history. Why do you think that 2020 will be the time?

-OK. Well, possibly within 10 years’ time, primarily because of the fact that the Chinese government has stated before that they would like for Shanghai to become an international financial centre by 2020. Now with that deadline, you need the renminbi to be a fully liberalised currency for that to happen. So, therefore, 2020 becomes a natural date. However, at the same time, I would just say that China’s regime has not been resisting appreciation of the renminbi; if anything, the renminbi’s been appreciating.

-But slowly, slowly, slowly…

-Exactly. Just slowly, slowly, gradual and stable as what the Beijing regime wants, not a big bounce-up.

-OK. Just, just quickly. What if this, your projection does come true? What is going to mean for the greenback? I mean, we’ve got QE now, QE2 now. Do you see the greenback continuing to weaken, becoming a lesser player and is it going to have an impact onto the US monetary policy?

-Well, when you say continuing weakening of anything, I’d say the USD has been rallying in the last couple weeks. And after the global financial crisis it still dominates the bulk of international trade; it still dominates global financial markets; it still dominates our reserve currencies. That’s not about to change. China’s rise as a global currency provider is inevitable, but that process is going to take more than two to three decades. What we will see is a more international charter about the rise of the renminbi and its acceptance for people across the world to use it to buy, invest and save. You are putting the Mao in everyone’s pockets around the world.