Hong Kong’s Chinese bond futures are a major step for the global yuan

On August 3, five-year Chinese treasury bond futures began trading on the Hong Kong stock exchange. Market attention has focused on the new product, but its real significance emerges when set against the deep shifts under way in the international monetary system. History offers a clear lesson: no currency has graduated from a trade settlement currency to a genuine investment and reserve currency on the strength of trade flows alone. Behind every reserve currency stands a government bond market...