Apr 3, 2023

China ‘dares to fight’ the U.S. reserve currency status

China is encouraging countries to take a bet against America.
China ‘dares to fight’ the U.S. reserve currency status

Get smarter about politics.

Our daily brief brings you need-to-know news and insights you won’t find in the mainstream media. 100% free.

State of play: Beijing has long opted for a “hide and bide” approach to foreign affairs, reflecting a once-pragmatic approach to growth. But today’s China is different. Under the leadership of Xi Jinping, the country has taken a sharper stance against the U.S.-led world order, offering a glimpse at a future beyond American hegemony. Recent developments highlight this point—Xi’s state visits to Russia, the China-brokered peace deal between Iran and Saudi Arabia, and now deep coordination between BRICS countries.

What it means: This new order—an association between five major emerging national economies including Brazil, Russia, India, China, and South Africa—would put the interests of a unified ‘global south’ first, utilizing financial institutions that would upend a U.S. reserve currency status. Essentially, China is encouraging countries to take a bet against America, using the yuan and other currencies instead of the dollar. This could have many negative ramifications for America and the world.

What China’s doing: China is building an alternative to the SWIFT system. SWIFT is a U.S.-owned network banks and financial institutions use to conduct financial transactions across borders. It has allowed the U.S. to be an economic rule maker of the world for decades and to sanction adversaries like Russia and Iran. Last Tuesday, Chinese and French energy companies settled an energy trade in yuan for the first time in history. A day later, Brazil agreed to use China’s alternative system, which “ditch[es] the United States dollar as an intermediary.” Asia Financial reports...

Great! You’ve successfully signed up.
Welcome back! You've successfully signed in.
You've successfully subscribed to Upward News.
Your link has expired.
Success! Check your email for magic link to sign-in.
Success! Your billing info has been updated.
Your billing was not updated.