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China's red money to take on the greenback

Tuesday, February 03, 2015 - 01:47

China's renminbi is climbing up the ladder for global currency status and is setting its sights on the U.S. dollar as convertibility grows worldwide. Jane Lanhee Lee reports.

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Look out George, look out Ben, Mao Zedong is coming your way. (SOUNDBITE) (English) REUTERS REPORTER, JANE LANHEE LEE, SAYING: "China's 'red money' may not have yet seen the inside of your wallet, but it is making its way out of the country and climbing the global ranks fast." Swift - a network connecting financial firms, that code you fill out when you wire money - said last week that China's renminbi currency made top five on the charts for international payments. Okay, so it's still tiny, a bit over two percent of all global payments. The greenback still has nearly 45 percent. But the RMB is close on the heels of the next currency in the ranks: the Japanese yen. And it's only been a little over five years that China has allowed it to be used in trade. Chinese traveling overseas used to make sure to buy the greenback before leaving home. Now they take their Mao bills and change them in many countries around the world thanks to China's push to make it a global currency. Some stores and taxi drivers in places like Hong Kong and Singapore will even take your Chinese money if that's all you've got left in your pocket. And over to Africa, Zimbabwe last year even included the renminbi in its basket of official currencies, as its own currency was deemed worthless. All this is huge if you consider that only two decades ago foreigners in China weren't even allowed to use the renminbi - the nation printed a separate currency for them. And that Beijing still tightly controls trading and exchange rates of the Mao bills, making them hard to buy or sell. So going back to the question, depending on how long it takes for Beijing to loosen controls, it could be anyone. ENDS

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China's red money to take on the greenback

Tuesday, February 03, 2015 - 01:47