The US-China trade war is helping boost China's long-term financial goal as China's Yuan is being maximized greatly in the international trade and financial deals.
According to the Industrial and Commercial Bank of China, the China's Yuan gained a total of 4.9-trillion Chinese Yuan in its overseas financial assets as of the second quarter of the year. In effect, the Yuan-denominated stocks and bonds increased to 2.5 percent and 3 percent, respectively vis-à-vis to the total assets obtained by investors worldwide.
Furthermore, the Yuan-dominated assets of various central banks worldwide have increased to 1.39 percent during the first quarter of 2018, its third straight increase from previous quarters.
Singaporean-based Saxo Capital Markets Strategist Kay Van Petersen said that the US-China trade war has strengthened the Chinese Yuan. He added that this is the consequence that the U.S. has to face after fighting various "multiple fronts." Petersen averred that this opens the door for an alternative of the U.S. Dollar as the universal currency.
These recent developments made financial strategists rethink the US-China trade war, especially that the Chinese Yuan is now showing signs of recovery in the global market.
The global payments messaging system SWIFT reported that the Chinese Yuan has maintained its spot as the fifth most active currency by value in July. Yuan's overall payments have increased by 9.91 percent than that of its value in June 2018.
Some market analysts also believed that the growth of the Chinese Yuan in the global market can boost China's ambition to build Yuan as an international superpower currency. The Chinese Government has opened its doors to foreign investors and foreign purchases of Chinese stocks and bonds. This has widened and strengthened Yuan's usage in the international trade payments. The Chinese Yuan has also benefited from the 2014's linkage of the Hong Kong stock market and China's Exchange as well as that of the Shenzhen Exchange in 2016 and 2017 Bond Connect system. In 2017, the Chinese Government also launched Yuan in its gold contracts during the Hong Kong exchange and Dubai exchange. It is also said that the Yuan will be further utilized in the future transactions of the Chinese Government on Petroyuan Oil at the Shanghai International Energy Exchange.
These strategies (and more) have opened numerous foreign investments in China which, in effect, brought the vibrant flow of investment to China's economy.
Traders believe that China is now reaping the benefits in its endeavor of working together with major oil exporters by having them use the Chinese Yuan in its trade with China.
