This is what always puzzles me,with all these statistical results suggesting china should already have a larger GDP than USA ,but the reality is opposite,my only conclusion is that Yuan is currently highly undervaled or the dollar is highly overvaled.
Just have a look at the serious imbalance between Chinese-American trading number you will know there must be something wrong with currency exchange rate
I guess maybe chinese government want the Yuan to stay low right now to avoid international capital flow in ,so china can upgrade its industrial structure quietly and steaily?
I think China will continue to adopt a very cautious, step by step approach to let Yuan grow in value.
First, it still makes more sense for China to keep Yuan undervalued because, as a developing economy, China still needs hard cash from exports (if it does not want to grow on borrowed money like SP12 style) although the share of exports in total GDP of China has been declining while the GDP is growing.
Second, having a "smaller" GDP makes more strategic sense because it allows the US (and the West) to enjoy the continued sense of superiority. It also keeps smaller nations at bay which would otherwise demand more from China (protection, help etc.). China does not want (and won't) a US style military hegemonism way beyond its strategic borders.
The Indian SP12 member who often talks about population divident is lost to the idea that his SP12 is sitting on a population time-bomb while his adopted country is being ethnically transformed, reducing the quality of population, as seen in the lower quality US military servicemen.
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Yuan IPO in HK may raise cash for Belt and Road Initiative
China Daily, January 10, 2018
The government is considering giving a green light to high-quality companies involved in the Belt and Road Initiative to raise funds
through a yuan-denominated initial public offering in the Hong Kong stock market.
The move would strengthen the market's role as a key offshore yuan business hub, according to a former vice-minister with the nation's top economic regulator.
The government would select some top companies related to the initiative and facilitate their fundraising in the offshore market, but there is no timeline for when an IPO plan might take place because it remains under discussion, said Zhang Xiaoqiang, vice-chairman of the China Center for International Economic Exchanges. Zhang was consulted on the development plan for the Guangdong-Hong Kong-Macao Greater Bay Area, which has not yet been publicly released.
"Through such attempts, the government hopes Hong Kong would be able to play a greater role in facilitating the initiative on the investment front and further promoting internationalization of the yuan," Zhang said.
Hong Kong's lack of restrictions on capital and currency convertibility makes it ideal as a core center for raising capital for Belt and Road Initiative-related projects, he added.
Huang Shaoming, head of the macroeconomy research department of Haitong International Securities, said raising more money in the offshore market will be helpful to fill the financing gap related to the initiative. That's especially so as the appetite to invest in initiative-related projects is under downward pressure from such external challenges as the corporate tax cut in the United States and China's increased efforts to lower leverage ratios.
Huang cited data from the Asian Development Bank saying more than 50 percent of the financing of infrastructure projects in Asia will need to be filled by private capital as of 2020.
In the meantime, the government push would help boost the current lackluster sentiment toward renminbi-denominated IPOs in the Hong Kong market.
In May 2011, Hong Kong tycoon Li Ka-shing's Hui Xian real estate investment trust completed Hong Kong's first yuan-denominated IPO, raising 12.1 billion yuan ($1.85 billion).
Since then, there has been no major renminbi-denominated IPO in Hong Kong, and securities traded in renminbi have only a negligible share of the main board's total turnover.
More overseas capital would be willing to bet on renminbi-denominated equities once foreign exchange rate risks are dealt with, providing that the yuan's exchange rate can be stabilized in the next few years, said Billy Mak Sui-choi, an associate professor at the Finance and Decision Sciences Department of Hong Kong Baptist University.
He said he expects the renminbi exchange rate to be stable in the medium term, while long-term prospects depend on Chinese economic growth.
http://www.china.org.cn/business/2018-01/10/content_50210082.htm