Author: jimmy67

Are Asian central banks using RMB as reserves now? [Copy link] 中文

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Post time 2007-10-21 22:45:13 |Display all floors
Originally posted by kelly888 at 2007-10-21 20:19

Okay, you know what you're talking about.
The RMB is a non-convertable currency, wake up your dream is over.



This is not quite correct. The CNY is a semi convertible currency. You can take out of the country 20,000 CNY without declaration. The Yuan can be exchanged in countries like Thailand, Singapore, Malaysia, Vietnam, Japan, RoK and in the SAR's of Hongkong and Macao. Probably even in more countries but I can only talk about my own experience.

For foreign commercial enterprises operating in China all profits after tax can be freely converted into any of the world's leading currencies and transfered abroad.


So much for the non-covertability.

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Post time 2007-10-21 22:55:22 |Display all floors
Originally posted by kelly888 at 2007-10-21 20:22


The EU is made up of 25 individual countries with 25 separate economies and 26 revenue generating bodies. The U.S. is only one country with one economy and one tax base. The fact that you are e ...



The Euro is the common currency in only  13 countries, namely in Finland, Ireland, The Netherlands, Belgium, Luxembourg, Germany, Austria, France, Spain, Portugal, Greece and Slovenia. That's it, not in any other EU nation simply because they do not meet the criteria for joining the Euro zone or did not want to join (UK, Sweden, Denmark etc.). As for your remark about many EU nations vs. the US as a single nation: it is much more difficult to meet all requests from different EU states than from one single nation with a national currency. The Euro is one of the greatest achievements of the EU and proves that Europe in spite of all diversity today can be considered as ONE huge economic zone. Something that has never been achieved before.

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Post time 2007-10-22 06:07:28 |Display all floors
Actually, the problem with the comparison is that the EU simply has more people in it. I tire of people conflating more people at lower levels of economic performance with "surpassing" anything. It's like arguing that the cargo capacity of a ship carrying one more ton is better even when it is eight times as large and just as much more expensive to operate.
"Justice prevails... evil justice."

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Post time 2007-10-22 09:48:23 |Display all floors
Originally posted by satsu_jin at 2007-10-21 22:45



This is not quite correct. The CNY is a semi convertible currency. You can take out of the country 20,000 CNY without declaration. The Yuan can be exchanged in countries like Thailand, Singap ...


The RMB is exchangeable not convertable, just like almost every other currency in the world.
The only places outside mainland that have RMB "deposits," meaning being able to open a bank account with or in RMB is here in Hong Kong and now Macau. These services are only available to locals holding Hong Kong or Macau Identity cards to prevent speculators or mainlanders from dumping all their money into Hong Kong or Macau banks.
The rules that apply to RMB deposits and transactions are set by Beijing, not Hong Kong.  
A fully convertable currency can be exchanged or deposited in any bank willing to offer the service in any country. For example, if I go to the U.S., Canada or many other countries, I can deposit Hong Kong Dollars into a savings account, RMB cannot. That rule is set by Beijing.

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Post time 2007-10-22 10:14:43 |Display all floors
Originally posted by kelly888 at 2007-10-22 09:48


The RMB is exchangeable not convertable, just like almost every other currency in the world.
The only places outside mainland that have RMB "deposits," meaning being able to open a b ...



Kelly,

I didn't contest this. What I wanted to point out is that as a tourist you can take CNY with you and change this money into local currency at your destination in East Asia. With the ever growing number of Chinese tourists this is quite important. Many come over here to Japan and change their local currency into JPY. This wouldn't be possible with a strictly non convertible currency.

Personally I believe that time is not yet ripe for China to go into full convertibility of the Yuan. Soros taught them to be very careful. Maybe in another 2 or 3 years this will change.

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Post time 2007-10-22 10:33:10 |Display all floors
I'm unsure about why it wouldn't be "the right time". Economics teaches a different lesson: it's only "not the right time" for politicians, for the economy, it's always the right time.
"Justice prevails... evil justice."

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Post time 2007-10-22 11:57:20 |Display all floors
Originally posted by interesting at 2007-10-22 10:33
I'm unsure about why it wouldn't be "the right time". Economics teaches a different lesson: it's only "not the right time" for politicians, for the economy, it's always the righ ...



From the political point of view it wouldn't be wise to go into full covertibility now. Too many predators are waiting in the bush to take their chance to harm China. The Asian financial crisis of the nineties isn't forgotten yet.

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