A recent history of currency devaluation is the polar opposite of what it takes to establish oneself as a reserve currency. If the recent past is any indication
nobody wants to hold Chinese unless they absolutely have to
a shrinking number of people and businesses have to
As could have been predicted, the recent temper tantrums (“Yay the USA is dying! BRICS is gonna kill it!”) were nothing more than an easily-predicted reaction to US inflation.
Nobody likes holding a currency that is worth a little less every year.
Nobody likes holding a currency that pays little or no interest.
Nobody like holding a currency that they are not soon-to-use for transactions.
China during the COVID lockdown and now China after the COVID lockdown are case studies in how to make a currency undesirable.
According to the Economist (which used to be known for its depth of articles and analysis) Chines Purchasing Managers Index (PMI) is falling both in goods and services.
And while they are both above the COVID depths when adjusted for the Yuan’s devaluation) PMI is net negative
When the Chinese government abruptly abandoned its zero-covid policy at the end of 2022, all bets were on a rapid economic rebound. . . . China has reopened with a whimper, not a bang. A range of economic indicators, including retail sales and investment, have risen less rapidly than expected. Some analysts now think the economy might not have grown at all during the second quarter.
Between January and May, for instance, real-estate investment fell by 7.2%, compared with the same period a year ago.
From Link 2
After the initial release of pent-up demand, economic data for April fell short of expectations. In response China’s stocks faltered, yields on government bonds fell and the currency declined. The country’s trade-weighted exchange rate is now as weak as it was in November, when officials were locking down cities.
From Link 3
A slew of economic data in the last few weeks fell short of expectations, and China appears to be teetering on the brink of deflation as reopening optimism fizzles.
Top investment banks, including Goldman Sachs and JPMorgan, recently cut their full-year GDP estimates for China, and warned of headwinds ahead.
Link 4
From toys and furniture to textiles and clothing, there has been a sharp drop-off in the percentage of US imports from China, and countries such as Mexico are taking advantage
Some Chinese companies have responded by setting up shop in Mexico, near the border, where goods are assembled and then brought to the US
Hmm it seems like once again you are rooting for the un-elected forces of socialism.
Anyway your favorite unelected socialists still have a youth unemployment rate over 20% . . . and it has remained over 14% even when their so-called economy was booming.
Maybe if they allowed free elections and free markets.
What have they got to lose except your love and support?
