Ms. Lagarde is the Managing Director of the International Monetary Fund, and she has done a lot of traveling this month.  She was in India from March 16 to 19 and in China from the 19th through the 23rd.  Today's quote on China's currency-referred to as the yuan, the Renminbi, or RMB-is from a statement she issued on her last full day in China.  Here is the paragraph with today's quote:

The International Monetary Fund will decide in October whether or not to include the RMB in the basket of currencies that define SDRs or Special Drawing Rights.  Four currencies stand behind SDRs today: the U.S. dollar, the Euro, the British pound, and the Japanese yen.  China is asking that the RMB be added to the mix.  Ms. Lagarde's comments last week were not a green light, but they were hardly discouraging.  Yes, China's last attempt to have the RMB included in the SDR basket failed, but the experts who follow these things are not seeing the past as prologue here.  As David Lubin of Citigroup put it, "There is a reasonably high chance that this year's vote will go China's way."

We are not experts on special drawing rights.  For us the principal significance of the likely addition of the RMB to the SDR basket is the statement it will make about China and China's currency.  The message will be that the RMB has arrived as a global currency, and in some respects that message, whether it comes in October or later, will lag the reality.  Already the RMB is "the world's fifth most widely used global payment currency ... [and] ... No. 2 for trade finance."  Add that to the fact that countries around the world are scrambling to do more trade through RMB - Canada announced its new RMB trading hub last week - and you are looking at a phenomenon that needs to be understood from a wider perspective than that of today's Congressional debate and the drive for currency provisions in TPA, TPP or both. 

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The logo of the Global Business Dialogue is a teapot.  For us it is a symbol of congeniality, of conversation and the pleasure of company.   From stationery to meeting signs, the idea of the teapot is part of all that we do, and so we shall take note of something else Christine Lagarde said during her recent visit to China.  Speaking to students at Fudan University in Shanghai, she talked about tea.  She said, "I would like to share with you a little secret: I have a weakness for Chinese tea, especially green and black teas."

And then she asked, "Why is my humble cup of tea relevant right now?  Because running an economy is akin to brewing an exquisite cup of Chinese tea - both require impeccable timing and a delicate mix of ingredients."