Yuan can play a greater role

Comment on "RMB's appreciation to remain gradual" (China Daily, Sept 13)

China is in a position to shape the world's foreign exchange system and allow the yuan to revaluate gradually. Later, it can maintain its export momentum, while its domestic demand starts playing a greater role at home.

But the transparency of China's foreign exchange mechanism and reliability of its banking system reliability (including the characteristics of money supply and demand) are more important. The ballooning loans of local governments should be of great concern for the Chinese leadership.

The yuan can play an important role along with the US dollar and the euro, even though the Chinese currency is not fully convertible. As long as China's trade continues to rise, the yuan's importance cannot be ignored.

Perhaps it is a good idea for China to shape the world's perception and win recognition for the yuan as a currency specifically for trade, savings and investments rather than a commodity for trade as China's trade grows.

After all, turning a currency into a tradable commodity is the handiwork of the United States, and not necessarily the choice of many other countries. If possible, many countries may have opted for a semi-convertible currency. I'd rather to see the US dollar, euro and the yuan exist concurrently, albeit with different characteristics.

Asian, on China Daily website

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(China Daily 09/19/2011 page9)