IMF Elevates Yuan to Elite Currency Status: So what?

© 2015 Prof. Farok J. Contractor, Rutgers University

Governor of the People’s Bank of China (China’s central bank) since 2002 and a cautious and methodical bureaucrat, Zhou is the essence of his country’s Mandarin class: canny and understated, but relentless in his objective to elevate China’s economy and currency to elite status. Under Zhou’s watch, China’s exports to the rest of the world almost quintupled (see Figure 1), and in 2015 China is the world’s largest exporter, with 13 percent of the global total. If one takes the World Bank’s purchasing power parity (PPP) exchange rate, the size of the Chinese GDP in 2015 is neck-and-neck with that of the US. (See my January 2, 2015 post Is China set to become the world’s largest economy in 2015? This post was also published at Rutgers Business Insights.) … CONTINUED ON ARCHIVE