An Overview of International Financial Instruments Issued - China

Abstract

The Chinese economy is now the world’s second largest and a key driver of global growth. It amounts to between 10 percent and 15 percent of world GDP (depending on how it is measured) and, in 2011, accounted for about one-quarter of world GDP growth. But among the currencies of the six largest economies in the world, China’s renminbi is the only one that is not traded easily and accepted worldwide - that is, it is not a hard currency. Cash instruments’ values are directly determined by the markets which basically includes securities, loans, deposits, etc. Whereas the derivative instruments derive their value from value of underlying assets such as index, interest rates, asset value, etc. They may also be classified as debt based or equity based. However, such products are still at a preliminary stage of development in China with a relatively small issuance amount.