Dimon Says China's Yuan May Rival Dollar's Role in 20 Years
Published May 07, 2018 11:19PM ET
Updated May 07, 2018 11:31PM ET
Dimon Says China's Yuan May Rival Dollar's Role in 20 Years
(Bloomberg) -- China has a long list of financial reforms to tackle before the yuan can rival the global role of the dollar, according to JPMorgan Chase & Co (NYSE:JPM). Chief Executive Officer Jamie Dimon.
“Eventually, it will be comparable -- eventually is 20 or 30 years,” Dimon said when asked in an interview with Bloomberg Television’s Stephen Engle whether China’s yuan would rise to have a role akin to the dollar in the global financial system. “It’s not comparable if it’s not convertible.”
China’s moves up to now, such as winning official reserve-currency status for the yuan at the International Monetary Fund, amount to “small” changes, according to Dimon. He regarded this year’s inclusion of some domestic Chinese equities into MSCI Inc. international stock indexes as a “nice thing -- it gets the world more educated about China -- but in terms of actual dollar amount” of inflows it’s “not going to be Earth-shattering to China or to anybody else.”
“They’re going to have to have a convertible currency” for overseas investors to participate fully in China’s domestic stock market, Dimon said. “That’s quite a ways away.”
When it comes to China’s bond market, now about $10 trillion, Dimon listed a number of needed reforms, especially for corporate securities:
- Transparency
- Governance
- Collateral rules
- Rule of law
- Open trading
- “Proper” research
- “Proper” credit agencies
“They’re on the way but they still have quite a way to go” to create a “really healthy bond market,” he said. “Until you can buy and sell securities freely -- if you have the U.S. dollar you can buy and sell securities freely -- then that’s a big thing.”
(Updates with list of needed reforms for the bond market, in bullet-point section.)
To contact Bloomberg News staff for this story: Christopher Anstey in Tokyo at canstey@bloomberg.net;Stephen Engle in Beijing at sengle1@bloomberg.net
To contact the editors responsible for this story: Christopher Anstey at canstey@bloomberg.net, Cormac Mullen
©2018 Bloomberg L.P.
Get The News You Want
Written By: Bloomberg
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.