China is one of the main apologists of the de-dollarization campaign. Beijing forges ahead with the policy of the yuan’s supremacy. Nowadays, the renminbi is recognized as one of the world’s reserve currencies. Still, Beijing endeavors to ensure the yuan’s dominance in international payments.
As a result of determined efforts, China somehow managed to phase out its dependence on the US dollar. Nevertheless, it is too early to affirm that the renminbi has squeezed the greenback out of global trade and replaced it. Indeed, the US dollar is a hard nut to crack even for the second-largest global economy. Speculations on the imminent failure of the US dollar resurface now and then. They mainly come from rogue countries unwilling to fit into the concordant development of the global economy. Remarkably, even completely isolated North Korea has to use dollars in its transactions.
For the time being, both the US dollar and the euro are at the stage of outflowing from investors’ portfolios due to aggressive increases in interest rates which curtailed liquidity of these currencies in many countries, Associate Professor at Yale University Dr. Yong Zhu said.
The expert reckons that the monetary tightening of the US central bank pushed several countries to resort to national currencies in international transactions. Among such countries are Russia, Iran, and India. China did not find it reasonable to team up with them, though apart from their local currencies, they widely use the yuan as a payment means. Yong Zhu acknowledged that the yuan is a fairly firm currency that could be paid to purchase any merchandise in the world.
The renminbi’s presence has been expanding on a global scale for obvious reasons. First, China’s humongous economy is actively involved in international trade. Second, Beijing has been ratcheting up its foreign trade. All in all, China provides the lion’s share of merchandise to the global market.
