According to an article from Bloomberg last week, Chinese officials told EU chamber that the yuan will achieve “full convertibility” by 2015. The People’s Bank of China said on Aug. 1 it will manage the yuan more actively against a basket of currencies, instead of just the dollar, and allow market forces to play a greater role.

Yuan has been in great demand in recent years as investors have started to lose confidence in Euro and USD which were the dominant trading currencies in the past. China has accelerated the use of the yuan in international trade, and took several steps. China’s announcement to launch yuan foreign-exchange options is another significant move.

With US deficit and Euro Debt Crisis, there are many talks that Yuan will be the next safe haven. Yuan products have bloomed especially since last year. However, investors must be wary of the products offered in the market. Given the current yuan restriction, many are CNH products, which are more complicated and less liquid (wider spread).

In addition, many investors buy yuan products because they were sold the idea of potential yuan appreciation. Though CNY has appreciated against USD. The chart below shows that SGD has in fact appreciated faster than CNY in the past two years.

What you will see is that, very soon, Yuan will become an international currency and it is impact will be as great as USD in the future