A Chinese clerk counts US dollar notes next to RMB (renminbi) yuan notes at a bank in Nantong, east China's Jiangsu province, 14 October 2013. Photo: AAP
Before the renminbi (RMB) can challenge the dollar, China needs to develop its currency to be convertible under the flexible capital flows in and out of China. By internationalising RMB through offshore markets, China is able to introduce openness and transparency without fully liberalising its onshore market or open its capital account. This process has started in Asia and is spreading quickly to other parts of the world.