Can China use widening yield gap between the US dollar and yuan to boost global role?

AI Summary

A researcher at a Beijing-based government think tank says China could use the widening US-China yield gap to strengthen the yuan's global role. The proposal focuses on improving financing, hedging, and asset-absorption systems while leveraging China's lower interest rates.

China should seize a window opened by the widening US-China yield gap to strengthen the financing, hedging and asset-absorption systems behind the yuan, turning its cyclical low-interest-rate advantage into lasting global use of the currency, according to a researcher from a Beijing-based governmental think tank. The 10-year US Treasury yield was 5.22 per cent on Thursday, compared with 1.69 per cent for Chinese government bonds on their first trading day after the National Day holiday – a gap...