Yuan versus Gold: successor to the dollar as the world reserveIs China the next superpower on earth? Will the Yuan be the new world reserve? Recent ongoing developments say “YES”. Can the yuan survive as a long-term global reserve? China, since the recent past, has been accumulating the yellow metal and its gold reserves are estimated to be around 2,710 tonnes till the end of 2013, China's latest official report in 2009 shows the figure as 1054 tonnes. China plans to use gold as a weapon in its currency war against the United States. US markets believed that gold would remain cheap in the coming years and increased their investments into the stock market. With India, the second largest buyer of gold, imposing customs duties on the purchase of gold, the availability of gold also increased and China purchased all the gold available in the market at the prevailing low rates . China also purchased gold mines around the world and transported the gold to China bypassing the London gold market. So the huge demand for gold did not increase the prices of gold and the five investment banks decided the price of gold only on the basis of gold in the world market, this which is not a true indicator of real supply and demand. China and its impactChina has signed the WTO. agreement in 2001 and had deeper integration with the global economy and also participated in free trade with the United States. China took advantage of its low-cost manufacturing conditions and established export-oriented principles to encourage foreign investment in China. Additionally, the Chinese yuan, meant to float against other currencies, was devalued against the dollar to increase demand for exports. With the increase in this demand, in the long run the Yuan becomes stronger against the Dollar and to prevent this the People's Bank of China printed large quantities of Yua...... middle of paper.. .... monetary system undermined in the Current world is not viable in the long term because a huge amount of currency in circulation must be guaranteed and an ounce of gold is equivalent to thousands of monetary units. Credit cards and printing money create enormous amounts of money in circulation that, at any given time, the value of the gold in reserves may not match the value of the collateralized currency. Every country is programmed to print money at every stage in order to revive its economy. Even China prints money to devalue its currency and has public debt. In the long term, China will face the same situation as the United States during the Bretton Woods system. Gold standards don't work over long periods of time, but gold itself does. But China can establish its yuan as the global reserve currency for a few years until the world completely turns to gold as currency, which is not yet possible...