Reply #18: No, it's not 'become a colony of China'

[muriel_volestrangler]

Many countries thrive when being a net exporter of raw materials, and importer of manufactured goods. Norway, Australia and Saudi Arabia, to take some different examples.

As for the value of the yuan - they are making it convertible, and trading directly with other countries with their own sizeable economies and currencies, like Brazil, is part of that:

A pilot scheme will start soon in Hong Kong to use the yuan to settle trade with selected companies in southern Guangdong province; China has signed yuan swap deals totalling 650 billion yuan ($95 billion) since December with six central banks; and on Tuesday two foreign banks said they had won permission to float yuan bonds in Hong Kong.

Zhang Guangping, vice-head of the Shanghai branch of the China Banking Regulatory Commission, acknowledged that a series of conditions would have to be met for the yuan internationalisation trend to gather momentum.

China would have to gradually make the yuan convertible on the capital account; it needed a more liquid foreign exchange market; its bond markets and banking system needed to be more developed; and there had to be proper monitoring of cross-border capital flows, Zhang told a foreign exchange conference.

But, hypothetically, he said there was no reason why the yuan could not account for over three percent of global reserves by 2020, the target date for Shanghai to have evolved into an international financial centre.

http://www.guardian.co.uk/business/feedarticle/8516462

And this is OK for Brazil because it cuts down on the transaction and currency-holding costs for the merchants, as the original article says. It doesn't actually say "all trade will be in the yuan, and none in the real" anyway.