The Treasury of the United Kingdom has noted that it has begun trading bonds in the Chinese Yuan.
Why is this a concern? The concern is two-fold: one, the currency and economy is centrally planned and manipulated in the People’s Republic of China. Not only is this in direct contradiction of the free-market model of the Western world — and not only is this validated by the Western world by sovereign funds trading in yuan; but this is also a concern of the authoritarian regime having a bigger centrally-planned grasp on Western economies, that is supposed to be relatively free from governmental controls past base consumer and business regulation.
Further, a serious concern is the manipulation of the currency itself by the Chinese government. Quite often, it depresses the yuan compared to the United States dollar, to inflate the US’ trade deficit with the PRC. Inso doing this, while it may be doing it strictly for the sake of manipulating its debt compared to the US currency, the reserve currency of the world, as it sits today — is the United States Dollar; and devaluing its currency compared to the US Dollar manipulates its value across the board. Is the United Kingdom taking a willing part in letting the PRC government manipulate its own currency and economic status by taking the yuan on as an informal reserve?
– China’s currency dream gets U.K. lift