The West’s spate of punitive measures against Russian financial institutions could have a side effect: encouraging emerging markets to steer away from the dollar a little more. But also accelerating the rise of the yuan, explains economist Michel Aglietta, scientific advisor at the Center for Prospective Studies and International Information (Cepii). In the book he co-published on 20. The race for global currency supremacy. Sino-American rivalry (Odile Jacob, 304 pages, 24.90 euros, with Guo Bai and Camille Macaire) he explains how China is about to shake the international monetary system.
Sanctions against the Russian central bank could lead to other financial institutions turning away from the greenback as a reserve currency. Is this the end of dollar hegemony?
The diversification of the world’s foreign exchange reserves has already begun: between 2001 and 2021, the dollar’s share fell from over 70% to just 59%. The yuan’s weight is still limited, but it is rising at a rapid pace as a number of countries attempt to break out of western orbit, particularly in Asia. Therefore, the war in Ukraine will undoubtedly accelerate this rise of the yuan internationally and the decline of the king dollar.
In the short term, China will probably be careful not to appear as Russia’s immediate and decisive aid. However, Beijing is thinking long-term. Its goal is to increase its autonomy and its independence from the United States, especially in raw materials and new technologies. However, Russia exports raw materials and rare metals, which are essential precisely for the development of high-tech.
Then there is the gas from Siberia, which Moscow could one day sell to China: there is no connection that would allow it yet, but geographically it would make sense. Beijing knows this and meanwhile continues to roll out its digital currency.
What role can it play in the rise of the yuan?
China has a head start in this area, having deployed its e-yuan across the country during the February Olympics. It is now starting international development with the “mBridge” project, a digital currency platform being implemented with Hong Kong, Thailand and the United Arab Emirates, which will enable cross-border payments in real time and at lower costs. because without an intermediary.
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