Simon Gleave Foreword (1 results)

Hardcover. Condition: Fine. Dust Jacket Condition: Very Good. Oversized hardcover, xv + 247 pages, NOT ex-library. Book is clean and bright throughout, with unmarked text, free of inscriptions and stamps, firmly bound. Gently worn, untorn dust jacket with scratches. -- The rapid growth of China's economy has propelled the Chinese yuan (CNY) to the forefront of global financial discussions, particularly in the wake of the financial crisis. As China navigates the path towards internationalizing its currency, the development of its capital markets and financial products plays a crucial role. This book provides an in-depth examination of China's economic landscape, its banking and foreign exchange systems, and the current state of onshore and offshore CNY-denominated financial products. It explores the evolution of key markets, including foreign exchange forwards, swaps, bond forwards, interest rate swaps, and forward rate agreements, as well as the nascent stages of wealth management products and non-deliverable derivatives traded offshore, particularly in Hong Kong. The authors argue that the underdevelopment of China's financial markets, partly due to government management of the CNY exchange rate and capital account, hinders the currency's progress towards internationalization. To mitigate risks associated with a more liberalized capital account and floating exchange rate, China must innovate and expand its range of CNY-denominated financial instruments, enhancing liquidity and risk management capabilities for both domestic and foreign investors. Drawing on historical parallels with the internationalization of the Japanese yen, the book outlines the necessary steps for the CNY to achieve global currency status, including the establishment of Shanghai as an international financial center by 2020. It identifies gaps in the current financial market, such as the absence of financial futures and options, and low liquidity in existing over-the-counter products, emphasizing the urgent need for product innovation to support China's economic ambitions. By analyzing market trends, regulatory frameworks, and the interplay between economic growth, financial market development, and currency internationalization, the book offers a roadmap for the future of CNY-denominated products and China's ascension in the global financial hierarchy. -- This book is significant because it addresses a critical juncture in China's economic history: the transition from a managed economy with a semi-closed capital account to a more open, market-driven financial system. As of 2023, China has made substantial progress in internationalizing the CNY, including the launch of the Shanghai Stock Exchange Science and Technology Innovation Board (STAR Market), expansion of the Shenzhen-Hong Kong Stock Connect, and increased participation in global financial institutions like the IMF's Special Drawing Rights (SDR) basket. However, challenges persist, such as capital controls, limited convertibility, and the need for further financial product innovation. The book's emphasis on developing CNY-denominated derivatives (e.g., futures, options) is particularly relevant today, as these instruments are essential for hedging risks in a more volatile global environment. For instance, the 2020 COVID-19 pandemic highlighted the importance of robust financial markets: countries with deeper, more liquid derivatives markets (e.g., U.S., EU) were better equipped to absorb shocks than those with less developed systems.…