Jeff Horwich: With consumer demand still sluggish in the U.S. and Europe, China is looking elsewhere for new customers to places like Brazil. In fact, this week China and Brazil agreed to a landmark deal that avoids using the U.S. dollar.
Here’s Juliana Liu from the BBC in Hong Kong.
Julianan Liu: Right now, if you’re buying a barrel of oil or a pound of coffee on global markets, you pretty much have to pay with the U.S. dollar.
China, the world’s second largest economy, hopes to change that. It wants its currency, the renminbi, to someday stand alongside the dollar in global markets for things like trade and investment.
This agreement with mega trading partner Brazil is another step in that process, says Frances Cheung, a Hong Kong-based senior strategist at the investment bank Credit Agricole.
Frances Cheung: It is actually part of their effort to try to internationalize the renminbi, to promote the use of it outside China. So, I think China is targeting to get the renminbi to be one of the reserve currencies, but not to replace the dollar.
Cheung says China will continue to push more deals like this in the next few years — and that eventually, some economists believe the Chinese currency may become a very real competitor.
In Hong Kong, I’m the BBC’s Juliana Lui for Marketplace