Yuan Tipped To Replace U.S. Dollar, Euro In Southeast Asia

[Lite Beer]

Yuan tipped to replace U.S. dollar, Euro in southeast Asia

BANGKOK: -- China's currency could be eventually used as an alternative to the U.S. dollar and Euro by southeast Asian countries, experts said.

Phathanaphong Phusuwan, a senior official of the Bank of Thailand, said in a seminar on Thai-Chinese trade, investment and finance relations on Saturday that the yuan would likely be used more between China and ASEAN member states in the long run.

In the panel discussion co-hosted by the National Research Council of Thailand, Huaqiao University and the Thai-Chinese Culture & Economy Association here, the official of the Thai central bank commented the Chinese currency could possibly replace the U.S. dollar and Euro when it comes to trade, financial and money-exchange dealings throughout the ASEAN community, due in part to the unresolved economic and financial problems in the United States and the European Union.

"In the long run from 2015 onwards, trade with Asia will largely increase under the ASEAN-China Free Trade Area agreement, which will influence the use of the yuan and the local currencies. The yuan is then a good alternative for the international trade in the future," said the official, referring to the year in which the regional bloc will become an ASEAN Economic Community.

Nevertheless, he said, the role of the Chinese currency in Thailand and other ASEAN states will remain limited in the short and medium terms.

Thai merchants have increased their use of the yuan in trade, following the easing of restrictions by the Chinese government, he said. A dozen Thai commercial banks and foreign banks' branches here currently offer yuan-based services, including foreign currency deposits, money exchange, fund transfers and purchases of Chinese banknotes.

The Chinese currency has accounted for 10.8 percent of China's trade dealings with the world during the first half of this year, according to a report of the Thai central bank.

Professor Ridong Hu of Huaqiao University's College of Economics and Finance remarked in the seminar that last year's total trade between China and Thailand amounted to 64.7 billion U. S. dollars, 22.3 percent increase over the previous year, turning Thailand into China's second largest trading partner in the regional bloc.

Thailand plays a leading role in promoting integration of the Asian economy as well as serves as a link and helps in the development of strategic partnership between China and ASEAN, the Chinese academic said.

Asst. Prof Kai Yuan of Huaqiao University's School of Law described the Sino-Thai trade and economic cooperation as a win- win option for both sides and that such bilateral relationship is the touchstone of success for trade, investment and financial sectors under the China-ASEAN Free Trade Area treaty.

-- TNA 2012-08-26

[chainarong]

And so say all of us , bullocks, they should do some numbers on China , they'd find she is not running in top condition,the star is starting to fade and has been for the past 2 years, china has a very long way to go Politically, domestically and in a number of important area's is about 25 years behind the USA, as I said bullocks , free speech is allowed on this web site, its doubtful i could say this in China.

[necronx99]

Well, to be fair, both the Greenback and the Yuan are currently based an a whopping amount of US debt.

Is there any difference between the two?

[chainarong]

Well, to be fair, both the Greenback and the Yuan are currently based an a whopping amount of US debt.

Is there any difference between the two?

33% No one wants to touch the yuan.

[LawrenceChee]

US dollar unfortunately has gone south and unlikely to recover ...it's current spending are based on lendings heavily subscribed by the Japs Koreans and Chinese

Yuan is the default currency in the near future and would do well to sit on some if u have spare cash

[Naam]

US dollar unfortunately has gone south and unlikely to recover ...it's current spending are based on lendings heavily subscribed by the Japs Koreans and Chinese

Yuan is the default currency in the near future and would do well to sit on some if u have spare cash

holding cash CNY (Yuan) is not easy but quite problematic. and the appreciation of the Yuan vs. USD for the last 4 years (linear about 1.4% p.a.) is nothing to rave about not to mention zero appreciation vs. a niche currency like Thai Baht.

"default currency in the near future" = no way!

disclaimer: i hold a substantial amount of CNY (as a diversification of assets) in form of bonds yielding ~4.8%.

Edited August 26, 2012 by Naam

[Naam]

Well, to be fair, both the Greenback and the Yuan are currently based an a whopping amount of US debt.

Is there any difference between the two?

33% No one wants to touch the yuan.

please elaborate what you mean by "33%". presently one US-Dollar buys 6.35 CNY. the chinese currency is heavily restricted and controlled.

[kevinsan]

The Chinese are awaiting the government transition before they crash the economy. For the next few months all is red as communist roses.

Government sponsored ghost towns. Millions of empty condos. Loans to nowhere and nobody. And steel mills at full production with very soft demand.

Only then will the devaluation commence. Can't wait.

I wonder if the Chinese fudge the economic data like some other to remain anonymous countries in Asia?

Only the most foolish minister would report bad economic data this year. Next year is a different beast.

[Jingthing]

Meet the new boss. Same as the old boss ...

[TomTao]

I think it is only a matter of time before the USD is no longer used as the global reserve currency, its continuing instability and the massive debt that is dragging it down and weakening the currency, the question then is what will replace it? I cannot see the Yuan being used as a reserve currency in the long run, the question still remains, what will replace the USD, any guesses?

[Jingthing]

I think it is only a matter of time before the USD is no longer used as the global reserve currency, its continuing instability and the massive debt that is dragging it down and weakening the currency, the question then is what will replace it? I cannot see the Yuan being used as a reserve currency in the long run, the question still remains, what will replace the USD, any guesses?

Maybe true in the long run, but I wouldn't be surprised if the USD still has some decades to go as the reserve currency.

[Naam]

I think it is only a matter of time before the USD is no longer used as the global reserve currency, its continuing instability and the massive debt that is dragging it down and weakening the currency, the question then is what will replace it? I cannot see the Yuan being used as a reserve currency in the long run, the question still remains, what will replace the USD, any guesses?

Maybe true in the long run, but I wouldn't be surprised if the USD still has some decades to go as the reserve currency.

i wish my remaining statistical life span is long enough to see the USD replaced as reserve currency. but that of course is wishful thinking

[Phronesis]

what will replace the USD, any guesses?

Gold

Edited August 26, 2012 by Phronesis

[KHR1010]

I think it is only a matter of time before the USD is no longer used as the global reserve currency, its continuing instability and the massive debt that is dragging it down and weakening the currency, the question then is what will replace it? I cannot see the Yuan being used as a reserve currency in the long run, the question still remains, what will replace the USD, any guesses?

Maybe true in the long run, but I wouldn't be surprised if the USD still has some decades to go as the reserve currency.

i wish my remaining statistical life span is long enough to see the USD replaced as reserve currency. but that of course is wishful thinking

Curious what your motivation is in wanting to see this change?

Edited August 26, 2012 by KHR1010

[churchill]

I don't think the Yuan would work for SE Asia .......same as Euro has not worked for Europe ......

http://www.nytimes.com/2012/08/24/business/global/chinas-economy-besieged-by-buildup-of-unsold-goods.html?_r=1&smid=tw-share

http://www.telegraph.co.uk/finance/financialcrisis/9491069/China-bubble-in-danger-zone-warns-Bank-of-Japan.html

[LawrenceChee]

Singapore and Malaysia government funds have bought in big on the yuan bills and co-op in many overseas investments together including a LPG deal in USA...so has Brunei. ...these are the richer ones in ASEAN with a say in policy

Myanmar depends on China aid and technology transfer for the impending big infrastructure builds...Vietnam may hate them on the surface but need to export their stuff.

Thailand and Laos is linked by the new highway to kunming ...

Indonesia and Philippines is too far off not land linked so their views matter little

Not far off mates ...another 10-15 years it will be here

[lannarebirth]

I think it is only a matter of time before the USD is no longer used as the global reserve currency, its continuing instability and the massive debt that is dragging it down and weakening the currency, the question then is what will replace it? I cannot see the Yuan being used as a reserve currency in the long run, the question still remains, what will replace the USD, any guesses?

I think currency baskets are and will continue to be the trend. I believe individual currencies will be evaluated on sovereign fiscal solvency and infrastructure.

Strike One:

http://www.businessinsider.com/bridge-collapse-china-2012-8

[daboyz1]

Pretty laughable. When are they going to let their currency float on the open market like everyone else?

[el jefe]

I think it is only a matter of time before the USD is no longer used as the global reserve currency, its continuing instability and the massive debt that is dragging it down and weakening the currency, the question then is what will replace it? I cannot see the Yuan being used as a reserve currency in the long run, the question still remains, what will replace the USD, any guesses?

Maybe true in the long run, but I wouldn't be surprised if the USD still has some decades to go as the reserve currency.

i wish my remaining statistical life span is long enough to see the USD replaced as reserve currency. but that of course is wishful thinking

Curious what your motivation is in wanting to see this change?

You should reread Naam's post. I'm in the same boat as Naam, I think. My statistical life expectancy is less than 50 years. I hope the statitistics are wrong and we live long enough to see the new reserve currency. I'm not looking for change. i just want to live to be about 150 years years old.

btw, no one noticed how many times the article said the Yuan COULD become the reserve currency. So COULD the Myanmar Kyat and the Lao kip. Ten years ago know-it-alls were saying that the Euro COULD become the reserve currency. in 50 years they'll be talking about how the Indonesian Rupiah COULD be the new reserve currency.

[Naam]

I hope the statitistics are wrong and we live long enough to see the new reserve currency

our chances are slim El Jefe!

[chainarong]

The Chinese are awaiting the government transition before they crash the economy. For the next few months all is red as communist roses.

Government sponsored ghost towns. Millions of empty condos. Loans to nowhere and nobody. And steel mills at full production with very soft demand.

Only then will the devaluation commence. Can't wait.

I wonder if the Chinese fudge the economic data like some other to remain anonymous countries in Asia?

Only the most foolish minister would report bad economic data this year. Next year is a different beast.

Having worked in HK and know China, when she starts to go sth, to save face , they will report false data, it took them two years to report the out break of bird flue, not until it got to HK, did they admit they had a big problem, i'd never trust a Chinaman, save face , big problem, Asian culture thing.

[chainarong]

Pretty laughable. When are they going to let their currency float on the open market like everyone else?

They wont , as soon as this happens the central bank has no control over its currency , that's a big worry to them , the key word is, control, like everything else in China ,it's all controlled.

[chainarong]

Well, to be fair, both the Greenback and the Yuan are currently based an a whopping amount of US debt. Is there any difference between the two?

33% No one wants to touch the yuan.

please elaborate what you mean by "33%". presently one US-Dollar buys 6.35 CNY. the chinese currency is heavily restricted and controlled.

Sorry, thinking of those clowns at BHP/B and their 33% drop in proffits , i think yuan lost 13% against the green back last wed /Thurs, you're right about control, they will never loose that, if they do ,they have lost control over the only power they have over the people , they have virtually lost everything else due to Facebook, twitter, social media etc , they have big population internal problems , in a nut shell the ministry of information is laughed at

[LawrenceChee]

U would have exert some manner of control to if u have 1.3 billion and about 600 ethic groups growing at a different pace versus some other developed countries where there is only 5-6 major interest groups ...I don't want to see gunman in my schools in the name of freedom ..sorry this is just my point drugs, guns have no place at society at large . So Is freedom I gladly opt out as I don't want my neighbor exercising that kind of choice

Not an easy job...due credit when it is due they have grown as fast as they as some others have dropped on standards

The currency is modeled after the Singapore basket model and is a good model seeing that countries will look put for yourselves first

[LawrenceChee]

Ditto to the western cultures who hide the billions of losses at banks and insurance companies ...ditto to the experts in the housing industry who knew the model was unsustainable but for years encouraged the general public to borrow more and put their money in one asset

....don't blame the Chinese or asian culture for that and at the same token trying to force poorer countries to accept meat imports laced with mad cow disease potential coz the votes depends on it

The bank execs are the same as the government at health authorities ...it's call human nature you don't want to spread panic and by the time the data supports it is something serious people blame you for not reporting it earlier ...

I hope u have worked in senior management before to know these calls are the toughest for management to make ...easy to criticize but not easy to be the one to report the news when you don't know what it is ....

[LawrenceChee]

Having worked in china and hong kong before ...I am surprised you don't know twitter and FB doesn't work in china ?

They have Taobao, qq, weibo etc have u been on those websites to see the Internet chatter ?

[yourauntbob]

Countries are going to have a hard time using the Yuan until it is allowed to float. The Chinese government is very protective of their currency and until they loosen up a bit I dont see many companies/counties swithing over to trade in a restricted currency.

[davejones]

And so say all of us , bullocks, they should do some numbers on China , they'd find she is not running in top condition,the star is starting to fade and has been for the past 2 years, china has a very long way to go Politically, domestically and in a number of important area's is about 25 years behind the USA, as I said bullocks , free speech is allowed on this web site, its doubtful i could say this in China.

Free speech s not allowed on this website - for one thing here is a certain newspaper that we are banned from mentioning. Is that what you mean by free speech? Have a read of "The End of Cheap China: Economic and Cultural Trends that will Disrupt the World", as it will give you a real insight into China, and not just the crap you read in the Western press. Yes, if course China is way behind the US, and it will take a long time to catch up. But many, including you, don't realise what is about to happen, and are underestimating China. It is vastly changed in recent years, but the anti-China rhetoric is based on previous years. In any case, the USA both economically and politically is a basket case.

[davejones]

If Asia continues to grow it will become less dependent on Western countries, so it will make more sense to them to use the Yuan as a reserve currency rather than the USD. This seems almost inevitable to me. Of course, the US won't be happy and will probably throw a few tantrums and start a few wars, but the fact is that the US won't be no. 1 for ever. They have had their time and it is coming to and end. They have truly massive debt, politicians that are deeply divided and a population who mostly haven't had any real pat rise for 20-30 years. And there are are slum communities springing up all over the country. Many Americans just can't accept that their time is over. Of course, things will still be great for many Americans, but as a nation they are going downhill. I think the American nation has self-esteem issues, and is unable to cope unless it sees itself as no. 1. But many other countries get along fine without being no. 1. America should sort itself out instead of trying to run the world.

[davejones]

Countries are going to have a hard time using the Yuan until it is allowed to float. The Chinese government is very protective of their currency and until they loosen up a bit I dont see many companies/counties swithing over to trade in a restricted currency.

The same could be said about the Euro. Greece, Spain, Italy, etc have, in effect, tied themselves to the Euro at the wrong exchange rate. They need to devalue but can't. Yuan will float freely at some point in the future. China has a huge economy to manage and they probably need to do what they are doing at the moment. The USA has plenty of trade barriers in place, so if they are going to start accusing the China or protecting their currency, then they should get their own house in order first. A simple example - QE is meant to weaken the USD. That is no different from what China is doing, except China is being very open about it and not pretending like the USA.