Chinese yuan, ever-more a global currency

Lee Beng-Hong, head of markets at Deutsche Bank China, rescheduled his interview with China Daily three times. He flies across the country to meet clients and business partners who want ever more to move the yuan in their pocket over the border.

Deutsche Bank is the 11th foreign bank to establish a foothold in the zone, set up in September as a testing ground for China's economic reforms that include capital account convertibility and interest rate liberalization.

"Surely but slowly global use of the yuan will rise as China gradually makes the currency fully convertible in both trade and investment," Lee said. "That spells huge opportunities for global banks like us."

Lee said the yuan's recent weakening against the dollar won't harm global enthusiasm about holding yuan. That's counter to some analysts' belief that many will stop yuan transactions as depreciation limits investment returns.

"Corporations have real demands to use the yuan as one of their payment currencies," Lee said. "The demand, supported by China's steady economic growth, far outweighs the exit of some speculators."

The yuan has gained about 20 percent against the dollar since 2005, providing an effectively guaranteed return that attracts investors. It weakened significantly this year amid wider fluctuations.

Data from the Society for Worldwide Interbank Financial Telecommunication show yuan payments remain strong.

According to the agency, the yuan ranked seventh in global payment currencies in March, rising to record activity share of 1.62 percent, compared with the US dollar's 40.19 percent.

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