Brian Spegele wrote in The Wall Street Journal about an accord between Great Britain and the People’s Republic of China concerning the role of the yuan in the world, or at least in the British economy.
The UK and China unveiled plans to further bolster China’s long-restricted currency on the world stage, amid a number of other deals that signal that the two countries have reset relations following a visit to London by the Dalai Lama last year, which upset Beijing.
The deals unveiled Tuesday—which include allowing British investors to plow up to 80 billion yuan ($13.1 billion) in China’s heavily restricted capital markets—demonstrate how China’s wealth and its desire to go abroad often trump political differences and Beijing’s resentment of criticism over its human-rights record.
The deals are part of a series of steps China has taken with a number of countries to increase the yuan’s role.
…state-controlled Industrial & Commercial Bank of China Ltd planned to issue a yuan-denominated bond in London, which would further encourage yuan use there.
This will be all well and good—until the PRC decides to “adjust,” again, the value of its yuan to match its convenience, as it’s done all along. Keep in mind that the PRC tightly controls the exchange rate for—the value of—its yuan, the government’s rhetoric about “increasing flexibility,” or “setting more flexible exchange rate bands,” or … notwithstanding.