"China’s De-dollarisation Initiatives: Strategies and Constraints" - by CWP alum Zongyuan Zoe Liu
Introduction: The national security dimension for expanding the international use of renminbi A decade ago, renminbi internationalisation was a fashionable topic in the debate over the future of global finance. Today, the conversation has shifted to China’s role in the slow but deliberate march towards de-dollarisation prompted by Western sanctions on Russia. Though Beijing’s push to internationalise the Chinese currency predates these geopolitical tremors, the threat of forced financial exclusion from the world’s largest trading economy has sharpened its resolve. In the last decade, China’s incentives to reform the global currency system have changed. As Chinese central bank governor Pan Gongsheng sharply summarised at a recent financial summit in Shanghai: whereas the 2008 global financial crisis put under strain economic and financial relations, the drivers today are geopolitical.1 The escalation of US-China trade tension since 2018 and the G7’s sanctions against Russian entities and individuals since 2022, especially the decision to freeze Russian foreign exchange reserves, have propelled China’s scholars and policymaking community to strategise how to immunise the Chinese economy against Western sanctions and strengthen China’s financial security.2 Chinese officials, academics and media people increasingly talk of the need to ensure self-reliance, protect the safety and security of China’s massive state-owned overseas financial assets,
© 2025 IAI IAI PAPERS 25 | 23 - AUGUST 2025 ISSN 2610-9603 | ISBN 978-88-9368-376-0
Zongyuan Zoe Liu is Maurice R. Greenberg senior fellow for China studies 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).
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