Should You Invest in The Chinese Yuan ?

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Due to China’s successful monetary policy of the past few decades, you may be wondering if you should invest in the Chinese yuan. The Chinese yuan, also referred to as the renminbi (“the people’s money”), is the legal tender issued by China’s monetary authority, the People’s Bank of China. The official currency has a floating exchange rate and China’s central bank controls its valuation in relation to other major currencies like the US dollar, euro, pound sterling, Swiss franc, and Japanese yen. Welcome to The Atlantis Report .

China’s current economic success did not happen by accident, or from random socio-economic conditions coming together. Instead, it occurred as a result of premeditated design; specifically, it has been a direct result of the government spending a significant amount to spur financial growth. The rise of the purchasing power of the Chinese currency constitutes an economic marvel that has occurred over the course of only a few decades.

In 1978, China suffered extreme poverty, but by 2013 it has been internationally recognized for its rapid economic growth. China’s economic reform has been based on a mixed market policy, blending a state-controlled economy and quantitative easing with a limited amount of capitalism. Today, the country occupies a unique position on the world’s economic stage when it comes to an emerging market. This financial breakthrough is a result of its aggressive economic reform plans and its large labor pool. Consequently, it is now the second largest economy in the world after the United States, displacing the Soviet Union, which was the second highest in 1980. It also has a higher nominal GDP than economic powerhouses like Japan and Germany. In addition, it is also the largest manufacturing economy and the largest exporter in the world.

So, all things considered, and despite many of setbacks, the Chinese yuan is rapidly becoming a viable investment and a global currency.

Currently, many investors are looking for an alternative to the US dollar. This is because the International Monetary Fund believes that the U.S. dollar is overvalued, while the Chinese yuan is aligned with economic fundamentals.

These are the Pros of Investing in the Chinese Yuan .
#1. China’s Economy is Growing, and Poverty is Falling .
#2. China Is a Global Financial Powerhouse .
#3. China Is a Net Creditor to the USA .

And these are the Cons of Investing in the Chinese Yuan .
#1. China’s Government, Businesses, and Citizens are in Debt .
#2. Local Governments Struggle to Provide Social Services .
#3. China has a High Rate of Corporate Loan Defaults .

If you’re evaluating a basket of major currencies in the foreign currency markets, then you’ve probably become aware of the potential significance of the Chinese yuan, after China became the largest economy in the world. You may also have become aware of the relationship between U.S. dollars to Chinese yuan because of all the news about the trade war and tariffs between the United States and China. Does China’s new era of prosperity now mean that its currency is a good investment? To answer that question fully, we must weigh the pros and cons of investing in the Chinese yuan. In short, the Chinese currency looks promising. Now is a good time to buy the Chinese currency. In many ways, its trajectory is similar to the Indian rupee, whose value is continuing to rise despite many economic setbacks because it is based on emerging market forces.