Enter the Dragon - Yes, the Chinese Renminbi will be entering into the International Monetary Fund Basket of Currencies by October 2016.
Cambridge Business dictionary gives the meaning of basket of currencies as "A group of different currencies that used by some countries to calculate the value of their own currency."
China, -according to Economist Adam Smith- "had long been one of the richest, that is, one of the most fertile, best cultivated, most industrious, most prosperous and most urbanized countries in world."
Modern day economists say that in the world of finance, the 19 the century has been the British Century, 20th Century has been the American Century and the 21st Century will be the Chinese Century.
As predicted by the economic peers, it will be Chinese Century. (Read - you can also be a winning seller)
The Chinese economy which has been stagnated from the later part of 16th century after its 1978 economic reforms has started galloping towards an unprecedented growth with the speed of GDP 9.5% per year. Its exports soared to the highest level in the world trade.
Total value of these exports is US$ 2.282 trillion in 2015. China's proportion of global exports rose to 13.8% last year (2015) from 12.3 in the year 2014. This is on the continuous rise. According to United Nations conference on Trade and Employment - "the highest any country has enjoyed since the United States in 1968". Now China has attained No.1 position in the world of exports. These factors has led to this IMF decision to include Chinese Renminbi in the basket of currencies and this action denotes that IMF has endorsed Renminbi as one of the easily acceptable currencies of the world.
The Impact on the e-commerce world.
The Global E-tail sales have risen to U.S.$1.155 trillion during the year 2016 as compared to US$ 694.8 Billion in the year 2013. It continues to rise and the projection for the year 2018 is US$ 1.506 trillion.
China contribute approxi- mately 60 to 65 percent of the world E-tail sales. Proportionately this contribution is also having a continuous rising. China's No.1 position can never be replaced in future since their on time schedule of supply can never be beaten by any other country. Moreover their steel supply stock is excessive and hence the other countries finding it difficult to compete with it.
The move of IMF decision to include RMB in the basket of currencies will have a bigger geopolitical impact rather than any noticeable impact on the World Trade corridor. Moreover, China will have a voice in the international monetary decisions. The China's RMB acceptance by IMF as a reserve currency makes China ready to have financial reforms in their country there by reducing the dominance of the US Dollar.
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