Could the Renminbi become a reserve currency?
RMB is not fully convertible. It is still too dangerous to use RMB as a forex reserve storage vehicle.
What does "inconvertible" mean? It means today you buy a house at 1 million Yuan. It's possible that tomorrow you can't buy a coke with the same amount, depending on changes in monetary policy of the central bank.
What does "fully convertible" mean? It means that a single country can't manipulate its own currency by itself. Who dare to use RMB as a forex reserve now? In the future, only after when it is fully convertible, maybe.
Is the U.S. bankrupt?
No! Countries using foreign currencies as reserves are not looking at the foreign country's actual balance sheet. They are using the expectation over the country's solvency and future earnings. As long as people believe that the US is ABLE to pay the debt, they will keep on lending to the US (by buying US T-bonds etc) and holding US dollars as reserves. It is an indeed rational act.
In addition, the price of a RMB (the exchange rate of Yuan against other currencies) does not mean how wealthy China is. It only reflects the supply and demand relation of the currency.
It is GDP PER CAPITA rather than aggregate GDP that reflects the national economic strength. Although our great nation [China] now ranks No 4 in the world in absolute GDP figures, there is still a long way to go before we truly become an "advanced" economy. By reminding ourselves this, we could keep in mind the gap and take out more efforts for the country and ourselves. [Ed. GDP/capita per year in the US is about $35,000 while in China is $4,000.]
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