Yuan currency swaps and trade with Pakistan, Thailand and Argentina

An article in the Sourcing Journal (Dec 28, 2011 news@sourcingjournalonline.com) describes a decision by the Chinese govt to permit yuan currency swaps with Pakistan, Thailand and Argentina. For example, 10 billion yuan were exchanged for 140 billion Pakistan rupees. Thus the yuan can be used for trade and banks can facilitate letters of credit in yuan. How will such currency swaps enable the global supply chain to access Chinese manufacturers and distributors ? Can the terms of these trades reflect a subsidy to source in China ? How should companies in other countries, or with global supply chains not involving these countries, react ?

About aviyer2010

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