Comment by kasey_junk

China maintains a soft peg on the yuan in order to keep their industrial output cheap.

Part of the way they do this is with heavy currency controls. Those currency controls make it difficult to do international trade with the yuan.

But worse from Chinas perspective you can’t maintain a peg if your currency is used to trade goods, particularly fungible commodities because the commodity itself becomes the medium of exchange and derails the currency peg.

That would be disastrous for their exporters and their economy is not in a position to sustain that currently.