The Chinese government has spoken out about the shift of the global financial system away from the USD, and the country wants to promote the renminbi as the world's dominant currency.
In a speech at the financial forum in Shanghai, the Governor of the People's Bank of China, Pan Gongsheng, remarked that the world is entering a new phase.
After decades of U.S. control over international monetary flows, Pan describes a multipolar system forming. He warns of the risks of over-reliance on one currency and predicts that the global economy will soon be coordinated by multiple sovereign currencies, thus controlling each other.
According to the Financial Times, the rise of the euro and China's renminbi since the 2008 financial crisis has been seen as the biggest changes in the global system in the last two decades. Currently, the renminbi has become the second and third largest trade finance currency for international payments.
The message is clear: the renminbi is not just coming—it is already here. And China is ready to expand further.
China builds global payment and currency infrastructure
After Pan's statement, European Central Bank President Christine Lagarde also commented that the “dominance of the USD” is increasingly waning. She suggested that the euro could take on a larger role in the global monetary system. But while Europe is still negotiating, China has acted.
On the day Pan spoke, six international financial institutions, including OCBC Bank Singapore and Eldik Bank Kyrgyzstan, announced their participation in China's CIPS system—an alternative to the Swift payment system.
China also announced a new digital renminbi operation center in Shanghai, expanding the national cryptocurrency program internationally. To connect the foreign exchange and domestic markets, the governments of Hong Kong and Shanghai have signed a cooperation agreement on the management and trading of renminbi-denominated assets.
Pan also mentioned that China and the ECB have signed a new cooperation agreement on central banking, including plans for regular policy dialogue. He emphasized that the dominance of the USD makes the global system vulnerable in political or military conflicts.
“When political conflict, national security concerns, or war occurs, the dominant international currency is easily weaponized,” Pan said. He also mentioned the IMF's Special Drawing Rights (SDRs) as a solution to reduce reliance on a single currency.
Zhu Hexin, Deputy Governor of the People's Bank of China, shared that China will expand the Qualified Domestic Institutional Investor (QDII) program, allowing domestic investors to purchase international assets to broaden overseas investment.
China rebuffs G7 on trade attacks and currency criticism
The relationship between China and the West is increasingly tense from multiple fronts. In the same week as Pan's speech, the G7 issued a statement demanding that China “stop disrupting the market and creating overcapacity.”
In a statement, the G7 countries, led by Canadian Prime Minister Mark Carney, criticized rare earth exports, Beijing's economic activities, and actions in the South China Sea.
Chinese Foreign Ministry spokesman Guo Jiakun dismissed the G7's accusations as “irresponsible,” “manipulative,” and “slanderous.” He argued that the allegations of overcapacity are merely a “trade defense reason” to curb China's development.
Guo criticized European Commission President Ursula von der Leyen, calling the current competition the “China shock” again. She accused China of using rare earth export controls and subsidized industries to hinder competitors in key areas. “As the Chinese economy slows, Beijing will pour billions of USD in subsidies into overcapacity to overwhelm the global market,” she said.
Guo rebutted that, “China's industrial subsidy policy always adheres to open, fair, and legal principles.” He asserted that Beijing has always acted in accordance with WTO laws and suggested that the EU has withdrawn from economic dialogue.
The China-EU economic conference negotiations have been canceled due to lack of progress on trade issues.
Guo concluded that cooperation, not confrontation, is the right way forward. “We hope the EU will cooperate with China to build an open, transparent, and non-discriminatory business environment to promote common development and mutual benefits,” he said.
Source: https://tintucbitcoin.com/trung-quoc-du-doan-chuyen-doi-can-can-tien-te/
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