China to see 2015 increase use of Yuan in global finance with more free trade

In 2013, use of the Chinese Yuan in global trade soared as it became the second most used currency in trade settlement, bypassing the Euro to become the largest trade currency outside the U.S. dollar. And with a growth rate in 2014 of nearly 8% over the previous year, the director-general of the department of international trade and economic affairs at the Ministry of Commerce in China on Jan. 15 announced that the world’s largest economy will seek to increase free trade agreements and bi-lateral settlements at an even greater pace than ever before.

The rise of the Yuan as a globally accepted trade currency came into its own last year when over 23 nations, including Great Britain and Germany, set up new swap lines to facilitate direct currency trading and bond issuance. And with the Asian power completing a multitude of other programs such as the Asian Infrastructure Investment Bank (AIIB), a historic oil agreement with Russia to purchase energy in Yuan rather than dollars, and the start of the New Silk Road initiative, China has setup 2015 to be a year where it can challenge the U.S. directly for supremacy in the global economic and financial arenas.

China will look to reach agreements with more nations as it strives to reduce dollar’s dominance, officials say

China will step up the pace of its free trade negotiations this year as it seeks to build stronger trade ties with more partners and reduce the dominance of the United States’ currency in the global trading system.

Zhang Shaogang, director-general of the department of international trade and economic affairs at the Ministry of Commerce, said China will launch FTA negotiations with Israel and initiate FTA feasibility studies with Colombia, India, Nepal, Maldives and South Pacific island nations like Fiji, Vanuatu and Papua New Guinea this year.

China has signed 12 free trade agreements with countries or regional blocs including Switzerland, New Zealand and the Association of Southeast Asian Nations, and finalized negotiations on FTAs with Australia and South Korea in 2014. – China Daily

Free trade using a nation’s own currency and bypassing the dollar is a growing trend in the wake of exported inflation that has wreaked havoc on smaller countries since the U.S. central bank began implementing Quantitative Easing programs and increasing the money supply. In fact, it is believed that Arab Spring uprisings were tied directly to the reserve currency and commodity inflation as nations such as Egypt and Yemen were unable to afford to purchase food commodities on the open market using the dollar.

The future of the global economy appears to be moving ever closer to the East, and to nation’s such as as China, Russia, and India who are working towards open and free bi-lateral trade versus the dying system of a centralized reserve currency. And with several financial infrastructures already in place that duplicate what is already in the West, coupled with the future concept of a New Silk Road from Korea to London well under construction, 2015 is very much shaping up to be the year of the Dragon, and a year where China competes directly against the U.S. for economic dominion.

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