Yuan's significance rises since financial crisis: experts

WASHINGTON -- The Chinese yuan has increasingly become a reference currency for emerging markets in East Asia against the backdrop of an economic crisis in the West, two US experts said Monday.

Since June 2010 when the yuan, also known as the renminbi or RMB, resumed floating, the number of currencies tracking it has increased, Arvind Subramanian and Martin Kessler said in an article published on the Financial Times.

"Over the same period, the number tracking the euro and the dollar declined," noted the two researchers from the Washington-based Peterson Institute for International Economics.

East Asia is now a "renminbi bloc," with the currencies of seven out of 10 economies in the region tracking the renminbi more closely than tracking the US dollar, said Subramanian and Kessler, respectively a senior fellow and a research analyst of the PIIE.

This shift stemmed from China's rise as a global trader, as its share of East Asia's manufacturing trade has risen from 2 percent in 1991 to about 22 percent nowadays, they noted.

Economies that either export to the burgeoning Chinese market or are locked in supply chains centered on China see the advantages of maintaining a stable exchange rate against the renminbi, they added.

"The renminbi bloc has now displaced the dollar bloc in Asia. The symbolism and its historic significance cannot be understated because East Asia, despite physical distance, has always been part of the dollar backyard," the experts said.