Issue link: http://resourceworld.uberflip.com/i/261649
www.resourceworld.com 27 F E B R U A R Y / M A R C H 2 0 1 4 in China about 30 years ago, its banking system was underdeveloped. As part of the program, it created state-owned spe- cialty banks from the then monobank structure. Over a number of years, through several banking reforms, China was able to launch initial public offerings of stock in five of its top banks, between 2003- 2005, raising close US $70 billion. Less than 10 years later, four of these banks have made it to the top ten in the world (Figure 4) by market capitalization. The strength of China's banking industry is a manifestation of a strong economy, well positioned for further growth and expan - sion and commensurate with its economic achievements. THE EMERGENCE OF THE REDBACK (THE CHINESE CURRENCY OR RMB) One recent development that has come from the success of China's Economic Reform is of great importance to the resource sec- tor and to China: the emergence of the Chinese RMB currency in world trade markets. The Canadian province of British Columbia recently became the first govern- ment in the Western world to issue a bond denominated in RMB. These developments will have a powerful influence on mineral resource trading. A few years ago, at the outset of the international financial crisis, the strength and reliability of the greenback, as an international settlement currency, was called into question, despite its long - standing history. Special Drawing Rights and other mechanisms were discussed to diversify away from the risk of holding or relying too much on the weakening green- back. No one at that time was imagining the possibility of turning to the redback as a hard currency for trade settlement. But over the last few years, and as sur- prising as the unannounced beginning of the Super Cycle about 10 years ago, the RMB is emerging with such strength that HSBC is predicting that by 2015, it will be the third-largest global trading currency after the US dollar and the Euro, and that it will be fully convertible in five years. This will be a monumental milestone in China's economic development, represent - ing the collective strength of a massive and sustainable level of domestic output and international trade. A free and major hard currency can open a whole host of new possibilities of future development, ranging from access to capital, to influence in setting terms of trade and settlement. The impact of these new developments will be significant, and you can be sure that experts are scrambling as we speak to devise the new quantitative economic modeling systems that will allow us all to keep up with them. One predictable devel - opment is that those who are predicting doom and gloom for China's economic growth will need to go back to the draw- ing board. n Sandy Chim, CA, is President and CEO of Century Iron Mines Corp. and a director of several other companies.