China urges ‘prudent’ yuan internationalisation as pace of adoption remains slow
- China’s efforts to boost international use of the yuan are still in progress, but prudence and caution have been advised
- With risk prevention the overall economic watchword, rash moves ‘for internationalisation’s sake’ discouraged by ex-officials, analysts
Beijing should promote the yuan’s use abroad next year by tapping deeper into emerging markets with loans and swap deals, but must also remain prudent and prepared to head off risks, former officials and analysts have urged.
The assessment came as financial regulators look to implement Beijing’s risk-prevention mandate and take a more pragmatic approach to expand the overseas influence of the Chinese currency.
“It’s nonsensical to push it merely for internationalisation’s sake, or for the frivolity of pursuing high rankings or bigger scale,” said Guan Tao, chief economist at BOC International, a Bank of China investment arm.
At a forum last month, he said the emphasis going forward had shifted to risk management and Beijing would not rush the process.
Guan, a former official with the State Administration of Foreign Exchange, added China’s financial opening must go hand in hand with the yuan’s broader use overseas and serve the real economy – those sectors that produce or trade in goods and services.