RMB continues to accelerate

Talk about a real win-win situation: RMB strengthening and Chinese companies expanding riding the stronger yuan wave. The RMB is fuel supplying more competitive cash reserves in a time when buying opportunities abound globally. The yuan is at an all time high, Chinese FX reserves are over a staggering $3.4 trillion, and Chinese companies are out there to invest. This time around, they are more nuanced and strategic than ever.

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Source: Thomson Reuters Eikon

The MACD Forest's bullish trend on the renminbi (above 0) are supported by forecasts in the market by 12 contributor banks as well. The current USD/CNY rate at 6.1465 is projected to be min 6.05, median 6.10 and max 6.13 by Q2 2014. Overall, not many seem to be bearish on the RMB's (CNY) ascent which will in turn make headwinds globally.

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Source: Reuters

Xi Jinping coins it the "China dream" and he is making sure adequate steps are taken toward a new vision, shown in his recent visit to Shenzhen, a city that is symbolic for getting reforms started (Deng Xiaoping started it). On March 3 and 5, the National Committee of the Chinese People's Political Consultative Conference (CPPCC), China's political advisory body, and the National People's Congress, the parliament, separately convened their annual sessions for the first time since the CCP launched its new leadership last year. If all goes to plan, we are about to witness (slowly) the seeds of a paramount reform in the next few years, that is already sprouting; internationalizing and expanding China's financial markets and developing the domestic financial system to global standards.

As the world's second-largest economy, one must wonder how Chinese banks will influence the global financial landscape and how the

From 2012 to 2020: Where the new leadership may steer China's economy, and what investors should know

Success And Succession

Change is in the air. With both China and the U.S. having chosen their leaders in the fall, the world's two most important economies are now set on a new trajectory -- new plans, new reforms, new investment opportunities. For the global economy, the two elections and the new leaders' relationship with each other will prove significant in the years ahead. The economic fates of China and the U.S. are tied together, similar to how the book Superfusion illustrates this symbiotic economic relationship between the two powers. In order to dig under the current election news waves, one must understand a bit of Chinese logic toward the world, the new leaders and how these will affect the country's economic landscape for the next 10 years.

It seems evident that

Underutilized or policy driven?

It is a striking fact that according to 2012 IMF figures, China's share of world GDP was close to 15% while its currency had a meager 0.24% payment value in 2010. In terms of the FX market, it is not surprising that the dollar is still the dominant currency for trading, making up more than 40% of currency market transactions, but the RMB is almost nowhere to be seen with less than 1% in 2011. As there is an evident global economic shift towards the Asia-Pacific, one must wonder how the RMB's share in the FX markets and in transactions still feel miniscule.

Figure 1. - RMB share of global FX trade in 2011 (Society for Worldwide Interbank Financial Telecommunication (SWIFT)

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Renminbi bloc

According to Subramanian and Kessler, respectively a senior fellow and a research analyst of the Peterson Institute