Renminbi Rising

Onshore and offshore perspectives of Chinese financial liberalisation

February 2014

Ever since China loosened its grip over the renminbi back in 2009, it’s gone from strength to strength. It’s already the world’s second most-used currency for trade financing. And some believe it could overtake the US dollar in the not too distant future.

Those based in China have a much greater stake in the development of the currency, which is tied inextricably to their own future, than those who use it as an investment vehicle. But as China’s economic influence grows, the global importance of the renminbi will become magnified.

Indeed, while for decades it has been a “greenback world,” dominated by the US dollar as the world’s primary reserve currency, many think a “redback world,” in which the renminbi enjoys premier status, is increasingly a possibility.

We spoke to 200 institutional investors, onshore and offshore, to get their personal take. Will China ever open its capital account all the way? How long will that take? And what effect — if any — will that have on its value?

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As China’s economic influence grows, the global importance of the renminbi will become magnified.