Extending the yuan's reach

Internationalization of the yuan is taking major strides towards becoming a reality. As China's biggest partner in the region, Malaysia needs to prepare itself for this eventuality, and increase the percentage of its trade with China that is settled in yuan.

According to a report released by the Bank for International Settlements in September, the yuan jumped from the 17th spot in 2010 to the ninth most actively traded currency in the world. The key lies in expansion of offshore trade.

In a report by HSBC, yuan usage is predicted to account for an estimated $2 trillion in 2015, which will catapult the currency to becoming the third largest trading currency after the dollar and the euro.