James Kynge writes in FT that China has geopolitical and financial aims in its attempt to internationalise the yuan. Hardly earth-shaking. He minimises the challenges:
Internationalising the renminbi requires opening domestic capital markets, but doing so cedes influence to foreign capital and invites foreigners to pick over issues such as Chinese corporate governance, sovereign creditworthiness, the administrative probity of local governments and a host of other issues that Beijing regards either as its own business or outright “internal affairs”.
For this reason, the aspiration towards greater global influence that China seeks through internationalising its currency may require a corresponding relaxing of control over financial markets at home. Although this trade-off may prove uncomfortable at times, it should not derail the grand design while Beijing believes it can gain more in international clout than it loses in internal control. [Link]
It is not just about accommodating foreign capital and relaxing control over financial markets. He should know that and I am sure he knows.
Arvind Subramanian comes closer here:
That China will be powerful without truly being rich limits the scope for a magnanimity of enlightened self-interest. [Link]