When Barack Obama and Hu Jintao meet this week, they are likely to repeat the tiresome shadow-boxing over the undervalued Chinese currency . But there seem to be quiet changes in the air. The People’s Bank of China said last week that the currency’s daily trading reference point was being increased, a sign that the renminbi could be allowed to appreciate. China is not buckling under global pressure. That’s not its style. It’s more likely using its currency to tame inflation. China is also making small moves to make the renminbi a global currency, not yet a threat to the dollar but a player in the game. It last week allowed its firms to use the renminbi as a currency for global?buys?and?investment. They are already allowed to use it to settle trade transactions. Elsewhere, the World Bank raised its first yuan-denominated bond. Hong Kong has seen private yuan bond issues as well.
Are these small opening moves on the strategic chessboard?