Alice Han

In spite of the fact that the currency has been relatively strong to the dollar, if you look at the trade weighted basket, and this is important, the CFETS and MEB index, that's China's currency relative to a basket of other trade related foreign currencies.

It's been going down since the beginning of this year.

It's been depreciating relative to the euro, to the GPY.

to a lot of these other trading currencies.

And this is excluding the US, where obviously we've seen this weak dollar story that's driven some degree of relative CNY strength this year.

But James, enough of my rambling about this.

What's your hot take on the CNY and why it matters?

Yeah, I'm somewhat skeptical that the voices that you mentioned will be the dominant ones in this debate.

As you know, James, for the better part of a decade, we've heard a lot of talk about China needing a stronger currency to promote the internationalization.

But when we look at the figures, they haven't really moved that much in terms of the share of global FX reserves, in terms of the share of global payments.

Now, they've marginally increased in the share of global payments.

But if you look at the share of FX reserves,

The U.S.

is still at about 56%.

China's is about 2% share of global FX reserves.

And look, if they really cared about strengthening the CNY, this could help actually make CNY more attractive for payments in trade invoicing and for an FX reserve in the share of other countries' global FX reserves.

So we'll have to watch this space.

I'm a bit more on the skeptical side.

One thing that I will add, as we're still in the midst of this phase two of a trade deal between the U.S.

and China, when I was in China in November, there was some discussion about a quiet plaza accord, you know, a la 80s between Japan and the U.S., where Japan quietly