RMB Reforms

The Yuan Leaps Forward

China Bullet train
It takes German brakes to stop a Chinese bullet train.
  • Why it matters

    Why it matters

    China’s financial system has long been sealed off, but now its more liberal policies will make business easier for foreign companies, including many erman firms.

  • Facts

    Facts

    • A new yuan trading center has been established in Frankfurt.
    • In December, the yuan became the world’s fifth most-used currency for payments.
    • To make use of the new rules, companies must have been active in China for at least three years and turn over €650 million ($742 million).
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  • Audio

    Audio

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Stopping a high-speed train is a delicate maneuver that requires the most modern brake technology. With the growth of China’s high-speed rail network, the demand for such high-tech safety elements is exploding, which is good news for German supplier Knorr-Bremse.

The Munich-based brake system manufacturer is setting records for orders and earnings in the world’s largest rail market. And because of recent steps by China to ease the flow of its currency, Knorr-Bremse can take more of its lush profits back to Germany, with less hassle and expense.

The Chinese financial system has long been sealed off by restrictions on how its currency, the yuan, moved from one market to another. Now the government is moving to liberalize currency policies, including the release of cross-border credits and establishment of a yuan-trading center in Frankfurt.

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