By Antoaneta Bezlova
BEIJING, Nov 21 (IPS) -
Wu Xiaoling, a former deputy governor of the central bank, told a seminar in Beijing this week that the Chinese yuan was ready to become an international currency to replace the dollar. Her words were largely interpreted as a signal that the central government might be preparing to move forward on loosening control over the currency to make a place for the yuan in the central banks’ foreign exchange reserves. At the moment, the yuan is only partly convertible for the purposes of trade and investment. But China’s readiness to inject substantial change into the global monetary system has been questioned by several leading economists, with Justin Lin, who now serves as the World Bank’s chief economist, being among them. Speaking at an economic forum in Beijing last month, Lin said China’s financial markets are not mature enough to play a bigger role globally and the yuan has to be fully convertible before it could develop as a major currency for international trade settlements. People’s Bank of China governor Zhou Xiaochuan said in October last year that there was no set timetable for the full convertibility of the yuan.