China to create special currency test zone By Simon Rabinovitch, FT.com June 29, 2012 -- Updated 0551 GMT (1351 HKT) Beijing (Financial Times) -- China plans to create a special zone to experiment with currency convertibility in Shenzhen, the city where it introduced key economic reforms three decades ago. Bejing will unveil the details on Friday as Hu Jintao, Chinese president, visits Hong Kong for the 15th anniversary of the handover of the city from Britain. Analysts say the experiment could prove as critical to eventually dismantling capital controls as Deng Xiaoping's reforms were to opening China to the world. The Qianhai experiment follows a series of steps taken by the Chinese government to move towards making the renminbi a convertible currency that analysts believe could one day vie with the US dollar for pre-eminence in global markets. <img src='http://i2.cdn.turner.com/cnn/dam/assets/120629054653-renminbi-china-note-story-top.jpg'>
I hope this experiment fails. The only reason we have not fell off the global markets is because the Dollar is the international form of currency. Somehow the world still doesn't realize our Dollar is 17 trillion dollars of debt in uselessness.
Well, if you benefit from the actions of the overlords that manipulate the dollar vs other potential overlords, I can see what you mean. But in the global, optimal-for-everyone sense, wouldn't it be better if we had more competing currencies? (I do get your point, ... I'm just sayin' is all.)
The minute the Chinese allow their currency to float freely against the dollar is the same moment they are doomed & their economy crumbles. Their entire economy is based on a bubble powered by the currency valuation imbalance driving export trade.
So we will have global currency controlled by central committee of communist party who despise currencies, free markets and "capital" is forbidden word.
China also have the 'Human Right' to be a Hegemon in our anarchic International system, of which its 'Peaceful Rise' is frustrating Violent USA to the extreme but however World War III between them as in military confrontation is not 'very' cheap. Its the 'Trade & Currency war' that is floating on the fixed G-2. I suppose that the experiment comes after recent Currency swap deals with BRICS and there was a covert grimace by the Chinese Govt. on its declaration of Surplus in Exports of the Balance of Trade, of which this new Special Monetary Zone would take effect in Global Economy not only gradually but systematically as the severity of Risk is high since 1997 and possibly the experience from the experiment would not last long till 2025. However, I appreciate another green step for the 'Socialism with Chinese Characteristics'.
China was a capitalist country until except between 1949-1979. dark ages of capitalism in china. capitalism was abolished for 30 years in China. Free markets,private property, laissez faire markets. been going on for thousands of years. communism or socialism didn't exist til the late 1800's and early 1900's and present.