The International Monetary Fund's decision to add China's yuan to its reserves basket is a triumph for Beijing, but the fund's verdict that the currency met its "freely usable" test will have little financial impact unless Beijing recruits more users.
The desire of Chinese reformers to internationalise the currency has a clear economic rationale; a yuan in wide circulation overseas would reduce China's dependence on the dollar system and on policy set in Washington.
It would also make it easier for Chinese firms to invoice and borrow offshore in yuan, reducing the risk of exchange rate fluctuations and prompting China's inefficient state-owned banks to improve their performance or lose business.
Those concerned about a potential global liquidity crisis caused by overdependence on the United States might also welcome the yuan as an alternative to the dollar, as would countries locked out of dollar capital markets by sanctions.
But to serve these purposes, there needs to be a much bigger pool of yuan outside China, which requires offshore institutions, and not just in Hong Kong, to buy and hold yuan.
For that, Beijing needs to liberalise the way money flows in and out of China and to grant the big foreign money managers easier access to an onshore bond market that is already attractive in terms of yield, size and credit rating.
"We have been evaluating China for years and the backdrop is relatively attractive from a fundamental standpoint, but we can't obtain the access," said Chris Wightman, a senior portfolio manager at giant U.S. financial group Wells Fargo.
"Currently the only access we can gain to that market is through the Hong Kong listings and they are very expensive from a relative value assessment. We just need to see the opening up of the local currency bonds in a meaningful way."
Some economists predict the IMF inclusion will boost demand for the yuan by more than $600 billion.
Chinese media predicted entry would draw over 1 trillion yuan ($156 billion) of foreign money into China bonds, although both predictions rest on the assumption that more capital account opening is on the way.
Foreign investors want Beijing to provide predictable and transparent legal and taxation treatment, and drop its penchant for pilot programs and quotas in favor of consistency.
They also want to know they can freely sell their yuan assets, not just buy, a concern that grew over the summer, when Beijing stepped into its stock markets to stop a sell-off.
Foreign investors are not making full use of the existing channels to buy Chinese assets that Beijing allows; quotas for the two Qualified Foreign Institutional Investor programs (QFII and RQFII) and the Shanghai-Hong Kong Stock Connect have yet to be used up.
And for all the impressive trade statistics, much of the "offshore" yuan isn't traveling the globe but bouncing to and fro across the internal border with Hong Kong, largely traded between Chinese companies.
"The number one thing we would like to see changed is that the QFII and RQFII quotas are dropped, just as they dropped in July the quotas for central banks, sovereign wealth funds and supernationals," said Hayden Briscoe, Director of Asia Pacific Fixed Income at AllianceBernstein in Hong Kong.
Others have called for Beijing to address distortions in its bond market caused by state support for some issuers and patchwork regulatory oversight.
It was little surprise after the summer stock interventions that index compiler MSCI said it was not ready to include yuan-denominated stocks in its indexes, citing reservations expressed by foreign institutional clients like national pension funds.
Central bankers also remain to be convinced and have yet to significantly crank up their yuan reserves.
"Markets in China have yet to evolve further in terms of breadth, depth and institutions," said a foreign central banker, speaking on condition of anonymity, adding he expects any increase in the offshore yuan pool to happen slowly.
"Once the currency becomes one of the currencies in the basket it is a huge responsibility on the part of the government to ensure the currency will be stable, and the economy will be open, to deserve the status," Ji Liqun, president-designate of the China-led Asian Infrastructure Investment Bank (AIIB) told a press conference on Tuesday.
But combining openness with stability has been a struggle in 2015. As China has lowered domestic interest rates to support growth, the yuan fell and capital fled.
Instead of opening the capital account to lure foreign investment, Beijing has been closing it to prevent outflows.
So on the same morning China was celebrating the yuan joining the dollar, euro, yen and pound in the IMF basket, the People's Bank of China took the time during its morning press conference to repeat that there was no basis for the yuan, already down 3% against the dollar so far this year, to decline further.
Both onshore and offshore yuan declined against the dollar in subsequent trade.
