China's motivations to boost the global standing of the yuan stem from
the same concerns as its calls for a new reserve currency. Greater use
of the yuan in trade would improve the competitiveness of Chinese
exporters by reducing transaction costs and currency risks. By
internationalizing the yuan China can also begin
extricating itself from the "dollar trap," in which the country,
through its trade, amasses giant surpluses of dollars, which forces it
to invest in dollar assets.
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