Between Washington and Mao
In Hong Kong, Chinese yuan can be used at supermarkets, luxury boutiques and even in taxis. While the official currency is the Hong Kong dollar, which is pegged to the U.S. dollar, Hong Kong is virtually within the renminbi zone.
If you pay taxi fare in Chinese yuan, the driver will thank you passionately, as he can gain profit by exchanging 100 yuan for 120 Hong Kong dollars.
It was just the opposite 10 years ago. Back then, if you used Hong Kong dollars in Shenzhen, China, the driver would be very pleased. The power of the yuan can be confirmed in taxis in Pyongyang. As Chinese capital flew into Pyongyang, the Chinese yuan is welcomed more than North Korean currency.
The bills with Mao Zedong’s portrait are supported by the economic strength of manufacturing and trade. Soon, it is expected to be included in the special drawing rights basket of the International Monetary Fund. While the basket is a currency on paper only - not used in real trade - it recognizes the renminbi as one of the supplementary foreign exchange reserve assets, boosting the reputation of the Chinese economy. It is a triumph in six years since China joined the currency war in 2009. China’s influence is rapidly growing globally.
As soon as Chinese President Xi Jinping returned from his U.K. visit, which resulted in a 70 trillion won ($60 billion) trade and investment agreement, German Chancellor Angela Merkel and French President Francois Holland dashed off to China.
Countries are asking China to make investments in them to take advantage of its $3.5 trillion foreign currency reserve. The public criticized U.K. Chancellor of the Exchequer George Osborne for trying to invite Chinese capital to complete a nuclear power plant whose construction had been halted due to budget constraints, as reported in the Sept. 26 issue of The Economist.
The Economist warned in an article titled “The Osborne Doctrine” that the trend of depending on China was not an individual incident. Considering Osborne’s position as the No. 2 in the Conservative Party and potential successor to David Cameron, the United Kingdom may become estranged from the United States and Europe. Any country that has economic connections with China suffers from a clash between those who find opportunities from China and those who see China as a threat.
Australia has enjoyed a boom for 20 years thanks to China’s exponentially growing energy demand. In a defense white paper, Australia called the United States the best partner in security traditionally. Yet, the white paper mostly discusses the existential issue of how to get along with China, the primary partner in economy as pointed out by Ian Morris, an American historian, in his book “War! What is it Good for?”
Could making a choice in the dilemma over the discord between China and the United States in the South China Sea be inevitable? Picking one of them is not just Korea’s problem. When it is a global phenomenon, Korea is not the only country to be pressured to take a side. Could we find an answer to the conundrum by betting on the new mindset that it’s not a question of choosing one?
The author is deputy political news editor at JTBC.
JoongAng Ilbo, Nov. 19, Page 34
by CHEONG YONG-WHAN