Yabadabado Posted June 22, 2012 Report Share Posted June 22, 2012 http://gulfnews.com/...ollar-1.1038104 China, Japan deal first steps in global shift away from dollar GCC trade may soon be in Yuan By Mohamed Al Asoomi, Special to Gulf News Published: 00:00 June 21, 2012 In a groundbreaking move, China, the world’s second largest economy, and Japan, the third largest economy, have agreed to use China’s currency yuan in their foreign trade, moving away from using the US dollar. The agreement between Asia’s two largest economies aims to broaden the use the global use of the renminbi, as the yuan is officially termed, and to see more countries move away from relying on dollars as a dominant currency in international trade. A similar move was earlier considered by China and India, Asia’s third-largest economy. The moves are seen as extremely important developments on financial and trade dealings, which come in light of a deepening financial crisis in the West. Asian economies are not quite far from crises hitting the world where both the Chinese and Indians have witnessed a slowdown, While the Indian rupee declined to become the worst-performing Asian currency. However, the Asian economies are still strong enough to absorb some shocks, a fact that is evident from China-Japan currency agreement in their efforts to cope with global changes resulting from the repercussions of the global financial crisis. Due to the size and significance of China and Japan, the decision to use the Chinese currency in trade exchanges will have long-term effects. First, the Chinese economic relations will grow significantly, as well as the use of its currency, which is gaining further importance in commercial and financial transactions. China’s currency is expected to become one of the most important global currencies. This shift forms a special importance to the countries of the Gulf Cooperation Council (GCC) for many reasons, most notably China’s weight in GCC’s foreign trade. Over the past five years, China has topped in UAE’s non-oil foreign trade, which rose to 10 per cent annually to about Dh110 billion in 2011. China also occupies leading positions in GCC’s foreign trade. According to Shaikh Abdullah Bin Zayed Al Nahyan, UAE Foreign Minister, trade between the GCC countries and China has increased tenfold last year to reach $100 billion (Dh367.8 billion). He expects that GCC-China trade will continue to increase in the current decade. Furthermore, China is turning to become the most important importer of Gulf oil, exceeding Western Europe and the US which are trying to reduce their dependence on energy sources from the Arabian Gulf, both through the development of alternative energy sources, as is the case in Europe or through discoveries of new sources of hydrocarbons along with sources of renewable energy sources, as is the case in the US. In view of this growing importance of economic relations between the GCC and China, it is difficult for these relations to grow further in light of the complete dependence on the US currency in their trade and financial relations, which requires raising the issue of the use of the Chinese currency in GCC’s trade dealings with China. And if this happens, both sides will achieve significant financial gains, including the possibility of taking advantage of the low value of Chinese currency and cutting the costs of transactions levied by US financial and banking institutions which are calculated in the US dollar. Although oil sales to China will continue to be charged in the US dollar, which is still the dominant currency in global oil markets, but the non-oil trade between the two sides can take place in other currencies, particularly the Chinese currency. This forms approaches for the future and keeps up with economic, trade and financial changes in the world, especially that China’s economy is expected to be ranked first globally over the next three decades, and it may increase further dependent on the GCC countries in meeting China’s needs of energy, petrochemical products and petroleum products, at a time of GCC imports will increase from Chinese products. Apart from China, the same method can be also followed with other emerging global currencies, including the Indian rupee, whereas India ranked second in the foreign trade of the GCC countries, not to mention the possibility of adopting a single Gulf currency in trade and international financial ties. This requires an integrated link between monetary policies and financial and commercial exchanges between the GCC countries and major economic blocs and countries, thus leading to diversity and reducing risks and costs, as well as increasing efficiency and gains in the relation between the GCC countries and their main partners in the world. Dr Mohammad Al Asoomi is a UAE economic expert and specialist in economic and social development in the UAE and the GCC countries. 3 Link to comment Share on other sites More sharing options...
Maggie123 Posted June 22, 2012 Report Share Posted June 22, 2012 Interesting article Yabadabado Thanks for bringing it in. WOW! How is this going to affect us and the dollar? Link to comment Share on other sites More sharing options...
R Veyron Posted June 22, 2012 Report Share Posted June 22, 2012 So it begins. Can't say we weren't warned. Link to comment Share on other sites More sharing options...
izza Posted June 22, 2012 Report Share Posted June 22, 2012 Interesting article Yabadabado Thanks for bringing it in. WOW! How is this going to affect us and the dollar? In a nut shell the more countries that trade between themselves with out using the US Dollar our dollar will become useless and unwanted and then become worthless. Just like with Iran excepting other monies for Oil, such as the rupee the Yuan gold silver or any other kind of currency, by doing this if more countries join this act and start using their money instead of the Petrodollar the US dollar will go in the toilet fast. That is why the US is going after Iran with a Motive. its not about the nuclear stuff they are doing, if it was about nuclear why are they not so concerned about Korea. JMO IZZA 3 Link to comment Share on other sites More sharing options...
Maggie123 Posted June 22, 2012 Report Share Posted June 22, 2012 Thanks for your insites Izza I agree with you whole heartedly about Iran and why they are going after them. They have been putting out a lot of lies and propaganda in regard to that situation. What are they going to do about China and Japan? Not looking to good since they really can't stop them. Link to comment Share on other sites More sharing options...
HughJeffin Byrd Posted June 22, 2012 Report Share Posted June 22, 2012 Thanks for your insites Izza I agree with you whole heartedly about Iran and why they are going after them. They have been putting out a lot of lies and propaganda in regard to that situation. What are they going to do about China and Japan? Not looking to good since they really can't stop them. I hope not the same thing they did to Japan on 3-11-11 Link to comment Share on other sites More sharing options...
jonjon Posted June 22, 2012 Report Share Posted June 22, 2012 I wonder if they’re going to RV the Yuan before they put it into effect as the world currency? It’s worth $0.1571 cents USD. I wish they would just make the IQD the world currency because I’ve got some of them. Link to comment Share on other sites More sharing options...
alan_coaks_3 Posted June 22, 2012 Report Share Posted June 22, 2012 it wouldn't suprise me if they yuan became the global reserve currency in the next 20 years Link to comment Share on other sites More sharing options...
randalln Posted June 22, 2012 Report Share Posted June 22, 2012 I wonder if they’re going to RV the Yuan before they put it into effect as the world currency? It’s worth $0.1571 cents USD. I wish they would just make the IQD the world currency because I’ve got some of them. DING DING DING give this man the prize You just answered all the worries and questions ....that are plaguing the world and the american economies ....... this is part of the bigger plan If theses countries ....All of them want to use the Chinese Yuan......they will have to R/V it .....and that in turn levels the playing field ....bringing the USD through the roof ....AND THAT IS JUST FACTS USE THE YUAN PLEASE AND QUICK I won't go in the particulars ...Im sure that the Currency Guru's will explain .....but all this is planed out for the next 20 years remember this sounds off subject BUT ITS NOT Japan .....80% sits at sea level or slightly above China ....80% of major cites (including Hong Kong) at or slightly above sea level ( all major manufacturing at sea level ) It takes 2 degrees in global temperature to melt both Ice caps ........that will raise sea level 20-50 foot in 10-20 years (thats a long estament )last time water was at this level 26,000 years ago (40% less land than we have now on the planet (only lasted 1-5 thousand years ...on a cycle )at or around temperatures we are seeing now caused by vulcanisem (proven by core samples from both poles ) Afghanistan ....90% above 5000 feet encompassed by mountains that push up to 12-19 thousand feet and no active Volcanic activity (think biblical stories ) and by the way 400 LSA's that house 10,000 people or more per site all controlled by WHO ??????? All this may not seem to tie in in your minds BUT....... the Gov.'s of the world always plan for the worst and hope for the best ...been this way for thousands of years ......will it happen ...ITS HAPPENING AS WE SPEAK Can it be proven ......THEY HOPE NOT ...at least till it won't matter any way .......... Goggle map the poles ...on SAT. settings ......and really pay close attention to Antarctica .....lots of blocked or photo shopped areas HMM ....and the same in China,Afghanistan ,Russia(in remote areas )and every other high spots on the planet and where is all the ICE in the north .....Its not there ....and no one seems to notice ..........??????????? And you say well.......what dose this have to do with the money why do you think every body around the world IS DRAGGING THERE FEET and fighting for stuff that 30 years ago would not have made a hill of beans why do you think it seems so important witch party controls the next 10 years ( in a time of emergency the last one in power has executive privilege ) that means they override all others that a-pose ( that is also built in to the IMF<WTO<UN<AND ALL OTHER EMERGENCY ORGANIZATIONS around the world ....and WHO's in control of most of them now ???????????????? Its starting too all line up .....and the closer it gets the clearer it will become Link to comment Share on other sites More sharing options...
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