"China Is Quietly Trying To Dethrone The Dollar" - By CWP Alum Zongyuan Zoe Liu

At their recent summit in Uzbekistan, members of the Shanghai Cooperation Organisation (SCO)—a prominent regional organization led by China and Russia—agreed on a road map to expanding trade in local currencies. A road map for using local currencies in trade and developing alternative payment and settlement systems has been part of the SCO’s economic plan for years.

This agenda is in line with individual policies on the part of the group’s most prominent members, including Russia’s attempt to cushion the blow of Western sanctions, China’s deteriorating relations with the United States, India’s use of nondollar currencies in its trade with Russia, and Iran’s recent proposal for a single SCO currency. Chinese President Xi Jinping proposed to address development deficits through regional integration, especially by expanding the shares of local currency settlements, strengthening the development of local-currency cross-border payment and settlement systems, and promoting the establishment of an SCO Development Bank.

Regional groups and small banks are helping insulate Beijing against sanctions. By Zongyuan Zoe Liu, a fellow for international political economy at the Council on Foreign Relations.

https://foreignpolicy.com/2022/09/21/china-yuan-us-dollar-sco-currency/#

Zongyuan Zoe Liu is a fellow for international political economy at the Council on Foreign Relations (CFR). Her work focuses on international political economy, global financial markets, sovereign wealth funds, supply chains of critical minerals, development finance, emerging markets, energy and climate change policy, and East Asia-Middle East relations. Dr. Liu’s regional expertise is in East Asia, specifically China and Japan, and the Middle East, specifically Gulf Cooperation Council countries. Dr. Liu is the author of Can BRICS De-dollarize the Global Financial System? (Cambridge University Press) and Sovereign Funds: How the Communist Party of China Finances its Global Ambitions (Harvard University Press, forthcoming 2023).

Photo Credit: https://pixabay.com/users/moerschy-127417/