Have a yen for some yuan?

Plan sees yuan as a world currency
In a recent reshuffle, the State Council announced that Ms Hu, a vice-governor who had been the director general of the State Administration of Foreign Exchange since 2005, was released from the foreign exchange job. It was taken over by Yi Gang, another central bank vice-governor.

The reshuffle was designed to enable Ms Hu to concentrate on the ambitious currency programme.

The new portfolio puts Ms Hu in charge of monetary policy concerning China's push to gain a bigger say in the world's currency system, including a recent pilot scheme to use the yuan for trade settlement with some countries, the economist said.

Yi Xuanrong - a financial expert with the Chinese Academy of Social Sciences - said the leadership had decided the time had come "to establish a task force and research teams on the topic, though it might take time for its realisation".

"The programme will also include measures to help Hong Kong develop as an offshore centre for the yuan, which is desired by both the central government and Hong Kong."

The recession has encouraged Chinese officials to speed up the currency programme. As the downturn erodes US influence, China is losing faith in the dollar and sees the time coming for the yuan to become a major world currency.
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One solution to the heavy money pumping China recently carried out is to export those yuan overseas and use global capital markets as a release valve, the same way the Federal Reserve can flood the world with greenbacks and suffer little inflation at home.

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