Guest Column

China set to benefit from renminbi settlement scheme

  • Published 09 Jul 2009

Nina Wu, senior fund manager at Hamon Investment Group, talks on the benefit to the financial sector following recent capital market initiatives.

China's stimulus packages during the current economic downturn reflect the country's belief that opportunity is a derivative of the crisis. In addition, we believe the country's Rmb 4,000bn ($570bn, €420bn, £360.8bn) stimulus package, significantly lower interest rates, rural policy changes, warming ties with Taiwan, and China's efforts to internationalise the renminbi, should improve the economic efficiencies of trade and focus growth on domestic demand. Falling interest rates and concerns about dollar-priced goods have lead to a higher demand for renminbi-value assets, gradually appreciating the domestic currency. Shifting the traditional export-oriented economy towards domestic consumption supports China's economic growth recovery, as reforming the renminbi monetary system provides both sustainable liquidity and potentially attractive investment opportunities for both the short and long term.

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