China and Argentina in $10bn deal
 

China and Argentina have made a tentative agreement to swap $10bn (£7bn) worth of their currencies.

The move, which allows both countries to bypass the US dollar, makes it easier for Argentine businesses to buy Chinese imports directly in yuan.

It also gives Argentina hard cash at a time when its finances have been hurt by the global financial crisis.

The deal comes after China suggested that the world should create a new reserve currency to replace the dollar.

The swap is being seen as a sign of China's ambitions in South America.

China primarily imports agricultural products from Argentina, while the South American nation buys Chinese electronic goods.

In the past, China has signed similar deals with South Korea, Malaysia, Belarus and Indonesia.
http://news.bbc.co.uk/2/hi/business/7973541.stm

Wait? So Argentina changed its currency to the Chinese Yuan?

No, it just means instead of using the Peso to change to USD to buy Chinese products, it will directly use RMB instead, and vica versa.

no, theyve agreed to settle up to 10 billion of trade using eachothers currency, instead of going through us dollars.

its all part of china's plan to ease dependence on the usd. theyve also signed deals with indonesia, malaysia and korea, part of their ambition to become the de facto regional currency. eventually they'll be able to free float the yuan too.

What does "free float the yuan" mean?

Right now, the Yuan is basically tied to the value of the USD. When the value of the USD goes up or down, the Yuan goes up proportionally. Free-floating the Yuan means that the Yuan is calculated independently of the USD, with all of the risks and potential benefits that provides.

http://en.wikipedia.org/wiki/Floating_exchange_rate

And China becomes one step closer to becoming a superpower and/or taking over the world..

China IS a superpower :thumbsup:

China doesn't need to take over the world..it has no interests in doing that, unlike the US.

the core of chinese philosophy is harmony. War is frawned upon and Chinese has never started a war with the west.

One could always argue that taking over the world is a path to "harmony".

GG