#[0] what’s your take on https://archive.is/2P2IC ? I’m no macro economist but it seems compelling - basically there’s no chance for yuan to materially dominate international trade because it’s not freely convertible, and if china were to let it be their export-driven economy would implode with a rising yuan.
Discussion
Makes sense. Yuan seems to be on a small hype rn
They'd also have to give up complete control of their capital account, and run a trade deficit with the rest of the world. They'd also have to be the kind of place in the world where people want to park excess savings.
The last part is particularly laughable, because even the Chinese rich go out of their way to park excess savings outside of China.
I mean if they opened up the currency to be more freely convertible you could argue it may be more interesting to save in. That’s part of the thesis here - the currency people want is the most freely convertible one. But, yea, giving up control of the capital account is required for that…
Rule of law is the other big one.