China’s quest for a mighty yuan could be a mighty yawn

Plus: Cutting Meta's Thread, the second coming of Shinzo Abe and more [Bloomberg]( This is Bloomberg Opinion Today, but it’s also FriYAY! So, apart from a distillation of Bloomberg Opinion’s opinions from Asia, Europe and the Middle East, you’ve got a weekend tip — if you happen to be in Tokyo. [Sign up here](. Today’s Must-Reads - [Birkenstock]( takes a step toward the stock market. - Trust is part of the [true cost]( of water. - The second coming of [Shinzo Abe](. - The European law that could cut Meta’s [Thread](. You’re Going Out there a Yuan But You’re Coming Back… a Yawn? The US and China may be the super-duo of power rivals nowadays, but that doesn’t mean each wants to destabilize the other. At least, not too much. Among lots of considerations, China needs to stanch the bleeding of supply chains from its factories and ports after an antagonistic period bolstered by Donald Trump’s presidency. Meanwhile, the US — which can’t seem to figure out whether it is about to tip into recession — would rather not have China convulsed by planet-shaking economic doldrums. That could make recovery harder for America. Hence, US Treasury Secretary [Janet Yellen’s]( visit this week to make nice (and offer at least solace). Amid all of this, there’s the roil over which country’s currency will reign supreme. Despite months of fevered speculation from Russia to Africa to the Middle East, there’s no contest about what is the world’s reserve currency. The Chinese yuan’s share of global payments has doubled in the last decade. Which means it is at a measly 2.5%. The US dollar is a high and mighty [43%](. Plus, the renminbi is in the middle of a summer swoon against the greenback. So how does one read the top-level promotion at the country’s central bank into all of this? Pan Gongsheng used to run the regulatory body that looked over foreign exchange. Now he is the Communist Party’s commissar overseeing the the People’s Bank of China (there’s nothing close to institutional independence in the mainland). Is this China’s way of starting a dramatic chapter in the — so far — one-sided dollar-yuan rivalry?  Daniel Moss in Singapore — who has paced through the halls of more central banks than anyone I know — [says Pan is a long-time PBOC insider]( and likely to keep policies as they are. Which means exchange rate intervention will be kept to a minimum. Daniel cites recent comments of the current PBOC governor Yi Gang (who Pan is likely to succeed), who says intervening isn’t effective because “sooner or later the market will defeat the central bank.” Shuli Ren in Hong Kong — who is our best weather vane for the way financial winds blow — sees Pan’s rise as benefitting the city’s capitalist credo. She says Pan represents the internationalizing the yuan and making it more competitive against the dollar. Hong Kong sees the writing on the wall. Last week, the stock exchange started allowing investors to trade the biggest listed stocks in yuan. “For a currency to go global, it needs to be traded in liquid international markets,” [Shuli notes](. She adds, however, that the uptake of the new program was “muted.” In short, while Beijing may want the yuan to rival the dollar, it’s a long term strategy, given the sentiments and momentum on the ground. It won’t happen overnight — or because of a single promotion. In the West Bank, Deja Vu All Over Again and Again A woman by her wrecked home in the refugee camp near Jenin in the West Bank. Photographer: SOPA Images/LightRocket More than 20 years ago, when I was news director of Time magazine, I assigned Bobby Ghosh to Jenin, the West Bank city where Israeli Defense Forces were laying earthshaking siege to a Palestinian refugee camp. We’re colleagues once more, here at Bloomberg. This week, I felt as if I’d fallen into a recurring dream with his column. Islamic Jihad — the Iran-backed guerrilla organization whose commander was killed at Jenin and whose influence had diminished in the intervening years — was again active in Jenin, which was also again the target last week of the IDF. As [Bobby notes](: “Iran’s greatest ally in the cause has been Prime Minister Benjamin Netanyahu, whose long encouragement of the appropriation of West Bank territory by Israeli settlers — and his indulgence of their aggressive, often violent conduct toward Palestinians — has for years provided Islamic Jihad with propaganda gold.” He adds, “It will not be two decades before the next Battle of Jenin breaks out.” It is the stuff that deja vu nightmares are made of. The Americanization of Andreas Kluth On this side of the Atlantic, we are going to miss the presence of our colleague Andreas Kluth, who is leaving today for America, specifically Washington, DC. For readers not familiar with him — where have you been? But seriously, here’s a much-too-short collection of pieces by Andreas, in case you missed them the first time around (or to put on your “a second time for pleasure” list). Expect a lot more modern classics when he’s finally settled in the US and tackling the diplomatic corps there. - The DNA Trapped In This [Stone-Age Bling]( Will Change History. - One Year On, Putin Must Wish He'd Read His [Herodotus](. - Elon Musk and the Confessions of an [Ayn Rand]( Reader. - Four [Ancient Truths]( to Help You Lead a Modern Life. Telltale Charts “There’s blood in the streets at present, most shockingly in France. Does that mean that we should follow the ancient investment maxim, attributed to Baron Rothschild and around at least since the Napoleonic Wars, and buy?” — John Authers in “[Blood in the Streets Is an Overrated Buying Signal](” “High finance has hit a low. Investment banking work has all but dried up and the private equity industry bears a lot of the blame.” — Paul J. Davies in “[The Private Equity Machine Will Be Tough to Unjam](” Further Reading Central banks can’t keep using interest hikes to [hammer]( their economies. — Marcus Ashworth A long anticipated mega-bank [merger]( could leave India grasping for liquidity. — Andy Mukherjee Wildfire smoke is bad for [asthmatics](but so is climate change leaves them even more breathless. — Lara Williams In the Land of the [Rising Sun](, daylight hours need to be recalibrated. — Gearoid Reidy How the UK's silver-haired [spenders]( may rescue the country’s consumer economy. — Andrea Felsted The fate of Jorge Luis Borges literary legacy may lead writers out of the [labyrinths](of copyright regulation. — Howard Chua-Eoan Weekender: Tokyo Aperitif From my colleague Ruth Pollard in Tokyo: Marie Chiba may be one of the boldest sake sommeliers in Tokyo today, but to her fans she is closer to a deity. The BeyHive and Swifties take note: You have nothing on Chiba’s devotees. Her premium sake and innovative food pairings have been described as “[life-changing](.” Legions of loyal patrons have followed her to her latest venture, Eureka!, in the capital’s hip Nishi-Azabu neighborhood, greeting each other like old friends as they arrive, ready for the next surprise. First-timers get ready: This is not your grandmother’s sake. Chiba blends her own and commissions special batches from nihonshu breweries. Her collection ranges from lightly sparkling to aged in bourbon barrels to a milky, unfiltered country-style brew. She’s used her background in chemistry to connect her creations with dishes like a jet-black oeuf mayo — a whole egg covered in glossy squid-ink mayonnaise — and a fantastic version of traditional karaage fried chicken. There are only 12 seats in this tiny gem, but Chiba’s alchemy is putting her at the forefront of the global sake renaissance. Watch the magic of Marie Chiba [here](. Drawdown You’ve made it to the end! So here’s a cartoon (and a dad joke) for your trouble. “Your lovely rump.”  Illustration: Howard Chua-Eoan Notes: Please send cooking tips to Howard Chua-Eoan (who eats out too often) at hchuaeoan@bloomberg.net. But any feedback will do. [Sign up here]( and follow us on [Instagram](, [TikTok](, [Twitter]( and [Facebook](. Follow Us You received this message because you are subscribed to Bloomberg's Opinion Today newsletter. If a friend forwarded you this message, [sign up here]( to get it in your inbox. [Unsubscribe]( [Bloomberg.com]( [Contact Us]( Bloomberg L.P. 731 Lexington Avenue, New York, NY 10022 [Ads Powered By Liveintent]( [Ad Choices](