China’s Yuan on Path to Become Global Reserve Currency

President Xi Jinping of China has voiced ambitions for a stronger yuan that could potentially challenge the U.S. dollar’s supremacy in financial markets. However, analysts point out that significant reforms are needed to propel the Chinese currency into a leading global position. Despite China’s substantial economic size, including being the world’s second-largest economy by GDP, challenges persist in elevating the yuan’s status. While China holds the largest share of foreign exchange reserves globally, the yuan represents only about 2 percent of central banks’ reserves worldwide, compared to the U.S. dollar’s 56.3 percent. Structural weaknesses within China’s financial institutions and government-controlled…