
The yuan has been one of the world’s most stable major currencies - known
https://www.economist.com/finance-and-economics/2020/06/13/the-yuan-has-been-one-of-the-worlds-most-stable-major-currencies
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Canada
What does that really mean? Is it stable for those who hold it in China where
the amount you can legally transfer overseas is limited and that limit has
been both going down and much more effectively enforced in recent years?

~~~
jialutu
With a more stable currency, this means more investor confidence, and more
confidence for other countries to trade using that currency. There are a lot
to be said on this topic, but overall, countries use another's currency to
facilitate trade look at 2 main factors: how big your economy is (to cushion
the global trade) and how stable your currency is. This was why the pound was
THE major global currency about 100 years ago, until it lost its empire, which
massively reduced the size of its economy, and hence the mantle was passed
onto the US dollar. In recent years, the US dollar seem to be starting to lose
its shine given the country is losing its stability and some US politician's
allure to the MMT
[https://en.wikipedia.org/wiki/Modern_Monetary_Theory](https://en.wikipedia.org/wiki/Modern_Monetary_Theory)

As for the amount limit that's transferrable, this is only there to
individuals to prevent capital flight (limited to $50,000 per annum), it's not
limited to companies.

I remember the last time I tried to buy a flight ticket with Qatar Airways,
one of the currencies they accepted was the yuan (kinda upset they didn't
accept the sterling). This probably will challenge the US Dollar's role as the
dominant currency, which is actually terrible for the US in its long term debt
structuring.

~~~
Canada
$50k? Those were the days. It's not even $15k now, and it's much more strict
in how it's added up.

~~~
jialutu
$15k? How does the students pay their tuitions nowadays then?

~~~
Canada
You can transfer out more than that from your account, if you can show
approved reasons. The $15k limit is on ATM cards+forex buys at the bank. There
are also tons of grey ways to get cash out too, especially if you have a lot
of money.

It's all just really shitty to have to deal with when it's your own money. So
yeah, not looking to "invest" in China until they allow the money to come out
no questions asked.

~~~
jialutu
Well, there is no country that would ever allow money to move in or out "no
questions asked". Why do you think there are a lot of terms like AML, or KYC
floating about in the finance sector?

Also, international payments are a pain in the first place. I'm based in
London currently contracting for a Singaporean firm, and they've still yet to
be able to make the payment due to IBAN, SWIFT code issues. And you'd think
that London and Singapore both being global financial centers, it would be
easy right?

But yeah, I take your point its really bad having too much restrictions on
moving money out of China, although I do think they are trying to change those
policies.

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mrath
In FX world any currency pair with yaun is not considered Major. It is not
even deliverable out side of china. So not sure what is the meaning of stable
here.

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eddieoz
And moving yuan to digital is the biggest move against the dollar.

Instead of doing a lot of conversions, or using 3rd parties, Chinese industry
will start to only receive yuan near in future because it is easier, faster
and more secure to them.

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Mikeb85
Of course it is. The Chinese government guarantees it's value, keeps it stable
vs. other currencies, and they're the second largest economy in the world
(largest by some measures).

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totalZero
Well, sure, when you manipulate the forex market, you can act to alter the
value of your own currency.

~~~
Synaesthesia
I sure wish we could do that (South Africa), instead our currency is at the
whims of international finance and investors, which makes it highly unstable.

We could also use exchange controls to arrest our capital flight which is just
draining us.

~~~
easytiger
You do realise that even the concept of discussing the desire for capital
controls are an exemplary reason to undertake capital fight?

The trajectory of the current South African de facto Kleptocratic ruling party
should worry anyone.

One might argue the currency fluctuations are the result of endemic policy
failure in every aspect of the South Africa governance. A result of a
ransacked economy, stolen in the guise of altruism by a corrupt ruling cabal.

Closing the economy, removing the scrutiny of outside participants, will only
seek to further assign it the moniker as yet another basket case economy

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moneytide1
Is currency stability correlated with sustained international investment?

Belt and Road Initiative implies construction (labor/resource deployment) to
solidify economic connections between regions/hemispheres where there are
various career specializations and resource concentrations. "Currency" implies
"current" (immediate) access to these things, therefore leverage to wield as
enabled by inevitable research breakthroughs?

------
9nGQluzmnq3M
[http://archive.is/NMvL7](http://archive.is/NMvL7)

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Barrin92
The shift towards stability coincided with the Yuan becoming a global reserve
currency in 2016. Probably a pretty smart move if China wants to establish the
Yuan as a global currency and start challenging the dollar, as the dependency
on the American financial system is one of the biggest threats China faces. It
also makes some sense given how quickly China is shifting from export
orientation towards domestic consumption, in which case a stronger domestic
currency is a pretty good idea.

Meanwhile in the US, oddly enough from both sides of the political spectrum
you have people toying with the idea of devaluing the dollar (predominantly
Warren on the left and Trump on the right), which would weaken the
international position of the US and of course effectively make American
consumers poorer.

Not unrelated China has also made the DCEP (sort of a digital RMB) a national
priority, probably with the same goals in mind

[https://www.ft.com/content/f10e94cc-4d74-11ea-95a0-43d18ec71...](https://www.ft.com/content/f10e94cc-4d74-11ea-95a0-43d18ec715f5)

~~~
redis_mlc
> devaluing the dollar (predominantly Warren on the left and Trump on the
> right), which would weaken the international position of the US and of
> course effectively make American consumers poorer.

Devaluing the dollar makes exports more competitive (cheaper), which is
appealing to leaders.

Also, it devalues China's US holdings, so bonus.

(The Chinese hate that the US can do that, and released a short film
explaining how that works, and warning the USA not to do it. The film used to
run on Chinese airlines. High-quality film.)

~~~
082349872349872
Part of the problem the USSR faced at implosion was that its major export,
oil, was not only produced in increasing supply (by saudi) but was priced in a
weakening currency (USD). If it turned out the US doesn't like countries like
Iran or Venezuela, a weaker dollar would serve foreign policy.

Also, a weaker dollar would be better for young people in the US. Making
exports expensive and imports cheap doesn't help an economy grow over the long
run* (see JPY), it only benefits those who already have lots of USD. So
depending upon the generational balance of power within the US, a weaker
dollar might also serve domestic policy.

* for short term goals (like M&A of the DDR) a strong currency can be beneficial.

~~~
redis_mlc
> Part of the problem the USSR faced at implosion was that its major export,
> oil

In 2019, 52% of Russia's exports were oil/fuel, and 96% for Venezuela.

Gotta wonder what their leaders do all day, besides crank the spigot.

The problem that the USA has with Iran is that they don't want a theocracy
with a nuclear bomb, yet Iran ia a regional industrial power, unlike other
Middle Eastern countries.

[http://www.worldstopexports.com/russias-
top-10-exports/](http://www.worldstopexports.com/russias-top-10-exports/)

[https://tradingeconomics.com/venezuela/exports](https://tradingeconomics.com/venezuela/exports)

~~~
modo_mario
>The problem that the USA has with Iran is that they don't want a theocracy
with a nuclear bomb

I don't think the fact that it's a theocracy plays any part in that or that it
isn't democratic enough for that matter. The fact that it's a long standing
enemy (admittedly partially of it's own making) and enemy to it's neighbouring
allies tho....

~~~
redis_mlc
> I don't think the fact that it's a theocracy plays any part in that

It's laughable to suggest religion plays no part in Middle East affairs.
Funniest thing I've read all week, actually. :)

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ciguy
The CCP has done a fantastic job manipulating their currency to benefit China
in the past few decades. Whether that will continue to benefit them over the
longer term remains to be seen.

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gkanai
The Bank of China pegs the yuan to the US Dollar afaik...

~~~
jialutu
That's pretty out of date information, a quick look on XE shows this is not
the case at all:

[https://www.xe.com/currencycharts/?from=USD&to=CNY&view=10Y](https://www.xe.com/currencycharts/?from=USD&to=CNY&view=10Y)

~~~
JMTQp8lwXL
That graph doesn't tell the full story:

[https://www.google.com/search?q=usd+to+yuan](https://www.google.com/search?q=usd+to+yuan),
click "Max"

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renewiltord
As of writing this comment all but one comment here is either a question
answered by the article, or a statement superseded by the article with better
information. Good job, guys.

> _What does that really mean? Is it stable for those who hold it in China
> where the amount you can legally transfer overseas is limited and that limit
> has been both going down and much more effectively enforced in recent
> years?_

Literally the entire point of the article is talking about this.

> _Well, sure, when you manipulate the forex market, you can act to alter the
> value of your own currency._

That's not the only method described, though it's powerful. Article describes
the rest - which are very interesting.

> _The Bank of China pegs the yuan to the US Dollar afaik..._

Better information in the article.

> _The Yuan is pegged to the US Dollar_

Better information in the article.

~~~
kristiandupont
I frequently go straight to HN comments instead of the article itself because
the article might be exaggerating a point to attract more clicks, whereas the
discussion is typically a bit broader. That people don't keep it DRY is a
feature to me, not a bug.

~~~
harpratap
The problem with this approach is that you are limiting yourself to the
narrative of a hive-mind. Although HN has done a better job of it then Reddit
but it still exhibits the same problems a lot of time.

~~~
kristiandupont
Possibly, but in true Dunning/Kruger fashion, I believe that I am immune to
that. And I have proof: I like Electron :-D

