Yin Jianfeng, Director of the Financial Research Center, Institute of Finance and Banking, Chinese Academy of Social Science, stated that China should avoid the Japanese yen’s mistake when pushing the yuan as an international foreign exchange reserve. Yin argued that the yen failed as an international currency due to Japan’s weak financial system, its high domestic savings rate, and the lack of an offshore trading center.
To push the yuan to go worldwide, Yin suggested using Asian countries, excluding Japan, to break into the international market, since China’s trade with these countries accounts for nearly 50% of its imports and 38% of its exports. “Hong Kong should be the yuan’s offshore international financial center.” “Trade in yuan should first start in Southeast Asia, with Hong Kong as the Southeast Asia yuan investment and trade center.”
Source: Xinhua, December 20, 2010
http://news.xinhuanet.com/2010-12/20/c_12900744.htm