With the rise of China, in the almighty yuan we trust

By Frank Ching

The sight evokes a feeling of shock and disbelief. There, down the side of the old Bank of China building in Hong Kong, hangs a huge red banner, just like during the Cultural Revolution in the 1960s and 1970s, when China sought to be the leader of world revolution. Then, the banners proclaimed “Long live the invincible thought of Mao Zedong,” or “Long live the Great Proletarian Cultural Revolution,” or, more simply, “Long live Chairman Mao.” Such signs disappeared after Mao’s death in 1976. In the last three decades or more, China has struck out in a different direction, eschewing revolution for economic development. Upon closer examination, the new red banner, with gold characters, turns out to be totally different from those of the past. Instead of exhorting people to follow the revolutionary path of Chairman Mao, it says: “Warmly welcome the issuance of yuan treasury bonds in Hong Kong!” China’s Ministry of Finance had announced last month that it was issuing US$3.64 billion worth of yuan-denominated sovereign bonds in Hong Kong to help internationalize China’s currency, the renminbi, reflecting the kind of advancement it has made since 1978, when Deng Xiaoping became the country’s paramount leader.

Meanwhile, in another attempt to reassure the international community that there is nothing to fear from a rising China, Vice President Xi Jinping, who is expected to succeed Hu Jintao as China’s next leader, said on Saturday that China would never impose its will on the rest of the world and instead wanted to “abandon the old mindset” and strive for global peace. “Even when China becomes developed in the future, it will never seek hegemony,” Xi told the World Peace Forum in Beijing. “China is always committed to economic development, world peace and common development of mankind … We must abandon the old mindset and approach that have been rendered obsolete,” he added. “We must keep pace with the times, forge ahead with innovation and foster a new security concept.”

While China’s leaders, quite rightly, have been reassuring the rest of the world that they have nothing to fear even if Beijing should become the dominant global power, it is inevitable that other countries are looking at China’s behavior today, particularly how the government treats its own people, to see if they really have no need to fear Chinese power.