The Yen vs. The Yuan

China has become so much of an economic powerhouse in the past decade that the flow of the Yuan has become more active than the Yen in the region. So much can be said about the two currencies and the economies of both countries, (China and Japan,) as Professor Hidetoshi Taga, a professor of international relations at the Waseda University School of Social Sciences, wrote in his Asahi Shinbun article focusing on the Greater Mekong Subregion, (GMS,) late last May:

There are two rivaling frameworks for the GMS program: the North-South Economic Corridor and the East-West Economic Corridor.

The north-south corridor represents a route from China to the Gulf of Siam. It starts at Kunming and runs through the Golden Triangle, reaching Bangkok. The east-west corridor starts at Mawlamyine in Myanmar at the western end and runs through Thailand and Laos to reach Hue and Da Nang in central Vietnam at the eastern end. This is a good route for distribution with ports at both the eastern and western ends…

Needless to say, China is providing a lot of support to the development of the north-south corridor. The other countries involved, which don’t want to allow China’s unilateral domination, have decided to use Japan as a counterbalance to China, entrusting Tokyo with the task of supporting the east-west corridor. This also serves Japan’s interests. Invisible presence

The ways Japan and China are making inroads into the region are very different. Japanese investment and aid are usually invisible to ordinary people and flow directly into state coffers, banks and factories’ vaults. The Chinese yuan, in contrast, is brought by Chinese to people in the region along with merchandise. For ordinary people in the region, settlements in yen or the creation of a yen bloc are more or less abstract concepts, and they probably find it hard to emotionally connect to these ideas. But the yuan is something quite familiar to them, and it is much easier for them to understand the use of the Chinese currency as an international currency like the dollar.

The Chinese currency is gradually penetrating the region as Chinese products and people are increasing their presence.

Read the entire article, (Flow of Chinese more visible than flow of yen,) here.

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