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China is ditching the dollar, fast: Officials believe the yuan has come of age

economist.com

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Re: China is ditching the dollar, fast: Officials believe the yuan has come of age

#21

Post by mertbio »

atonse wrote: post #16
intalentive wrote: post #7

World reserve currency status follows the leader in manufacturing and trade. Maintaining dollar hegemony was never going to be feasible after de-industrialization, but short-sighted decisions like weaponizing SWIFT have accelerated its decline. As the dollar is gradually shunted out of world trade, the US will be less able to export its inflation abroad. The implications won’t be pretty.

For all of its current very high profile issues of uncertainty in the US, who would actually trust China in any way shape or form as an alternative? It’s a totalitarian state who has been jailing its wealthiest businesspeople on a whim, causing many to flee, and it’s about to embark on an invasion of its peaceful neighbor. Which part of any of that screams “that currency will be a stable place to store my money?”

> who would actually trust China in any way shape or form as an alternative?

Most of the Asian countries (except South Korea, Japan and Taiwan) and African countries. They’re already getting tons of investments and loans from China.

Re: China is ditching the dollar, fast: Officials believe the yuan has come of age

#22

Post by atonse »

mertbio wrote: post #21
atonse wrote: post #16

Earlier quoted context omitted.

For all of its current very high profile issues of uncertainty in the US, who would actually trust China in any way shape or form as an alternative? It’s a totalitarian state who has been jailing its wealthiest businesspeople on a whim, causing many to flee, and it’s about to embark on an invasion of its peaceful neighbor. Which part of any of that screams “that currency will be a stable place to store my money?”

> who would actually trust China in any way shape or form as an alternative? Most of the Asian countries (except South Korea, Japan and Taiwan) and African countries. They’re already getting tons of investments and loans from China.

Getting investments isn’t the same as adopting a currency as a reserve for its stability.

Re: China is ditching the dollar, fast: Officials believe the yuan has come of age

#23

Post by rdm_blackhole »

atonse wrote: post #16
intalentive wrote: post #7

World reserve currency status follows the leader in manufacturing and trade. Maintaining dollar hegemony was never going to be feasible after de-industrialization, but short-sighted decisions like weaponizing SWIFT have accelerated its decline. As the dollar is gradually shunted out of world trade, the US will be less able to export its inflation abroad. The implications won’t be pretty.

For all of its current very high profile issues of uncertainty in the US, who would actually trust China in any way shape or form as an alternative? It’s a totalitarian state who has been jailing its wealthiest businesspeople on a whim, causing many to flee, and it’s about to embark on an invasion of its peaceful neighbor. Which part of any of that screams “that currency will be a stable place to store my money?”

> For all of its current very high profile issues of uncertainty in the US, who would actually trust China in any way shape or form as an alternative?

People would trust China for the same reason people still trust the US after it invaded 2 countries in the middle east for no reason whatsoever and decided to imprison 2 million of it's citizens at any given time.

If tomorrow there are better prospects of making money in China, then people will go to China and use the yuan to store their wealth. It's that simple. Morals have nothing to do in this equation.

Re: China is ditching the dollar, fast: Officials believe the yuan has come of age

#24

Post by mertbio »

atonse wrote: post #22
mertbio wrote: post #21

Earlier quoted context omitted.

> who would actually trust China in any way shape or form as an alternative? Most of the Asian countries (except South Korea, Japan and Taiwan) and African countries. They’re already getting tons of investments and loans from China.

Getting investments isn’t the same as adopting a currency as a reserve for its stability.

The US dollar lost ~10% of its value this year. It is expected to lose another 10%. Which stability are we talking about?

Also, here you can see the change in the foreign exchange reserves by currency: https://en.macromicro.me/charts/116488/global-official-forei...

US Dollars: 71% -> 58% Chinese Yuan: 0 -> 2%

Re: China is ditching the dollar, fast: Officials believe the yuan has come of age

#25

Post by slaw »

mertbio wrote: post #24
atonse wrote: post #22

Earlier quoted context omitted.

Getting investments isn’t the same as adopting a currency as a reserve for its stability.

The US dollar lost ~10% of its value this year. It is expected to lose another 10%. Which stability are we talking about? Also, here you can see the change in the foreign exchange reserves by currency: https://en.macromicro.me/charts/116488/global-official-forei... US Dollars: 71% -> 58% Chinese Yuan: 0 -> 2%

Where did you get info about losing another 10%?

Re: China is ditching the dollar, fast: Officials believe the yuan has come of age

#26

Post by rootsudo »

atonse wrote: post #16
intalentive wrote: post #7

World reserve currency status follows the leader in manufacturing and trade. Maintaining dollar hegemony was never going to be feasible after de-industrialization, but short-sighted decisions like weaponizing SWIFT have accelerated its decline. As the dollar is gradually shunted out of world trade, the US will be less able to export its inflation abroad. The implications won’t be pretty.

For all of its current very high profile issues of uncertainty in the US, who would actually trust China in any way shape or form as an alternative? It’s a totalitarian state who has been jailing its wealthiest businesspeople on a whim, causing many to flee, and it’s about to embark on an invasion of its peaceful neighbor. Which part of any of that screams “that currency will be a stable place to store my money?”

"It’s a totalitarian state who has been jailing its wealthiest businesspeople on a whim, causing many to flee, and it’s about to embark on an invasion of its peaceful neighbor."

To be fair and very frank: the USA does the same things

Peaceful neighbor: greenland or mexico (sure the cartel related violence but it isn't per se state.)

Jack MA is the famous chinesse example, but it was close enough for bill gates, howard hughes and mark zuckerberg.

Totalitarian state: It depends, as someone born in the USA, I've felt much freeer in China then USA. USA states and cities have been pushing things such as teens/kids can't be alone - yes it isn't federal.

More recent, just look at the turning point usa assination - don't want to get to political since that's a black hole of political theater there but - that isn't common outside the USA.

Credit system: USA's credit system is much more abusive then china's social credit system.

While most of the issues are just present in the current administration, and should go away with the next administration - China has acted more responsibile and more consistent with it's policies while the USA is going all over the place lately.

But for terms of currency, both are not great as of now - the rmb pegged to dollar will change soon, usd reserve currency is eroding everywhere.

tl;dr buy gold I guess

Re: China is ditching the dollar, fast: Officials believe the yuan has come of age

#27

Post by scrubs »

atonse wrote: post #16
intalentive wrote: post #7

World reserve currency status follows the leader in manufacturing and trade. Maintaining dollar hegemony was never going to be feasible after de-industrialization, but short-sighted decisions like weaponizing SWIFT have accelerated its decline. As the dollar is gradually shunted out of world trade, the US will be less able to export its inflation abroad. The implications won’t be pretty.

For all of its current very high profile issues of uncertainty in the US, who would actually trust China in any way shape or form as an alternative? It’s a totalitarian state who has been jailing its wealthiest businesspeople on a whim, causing many to flee, and it’s about to embark on an invasion of its peaceful neighbor. Which part of any of that screams “that currency will be a stable place to store my money?”

I hear you on China loud and clear, however the balance of focus must be on us, the US, not shooting ourself in the face anymore. Debt, current account deficit, and interest payments have got to get in order. Our house needs to get in order by us for us.

Re: China is ditching the dollar, fast: Officials believe the yuan has come of age

#28

Post by mertbio »

slaw wrote: post #25
mertbio wrote: post #24

Earlier quoted context omitted.

The US dollar lost ~10% of its value this year. It is expected to lose another 10%. Which stability are we talking about? Also, here you can see the change in the foreign exchange reserves by currency: https://en.macromicro.me/charts/116488/global-official-forei... US Dollars: 71% -> 58% Chinese Yuan: 0 -> 2%

Where did you get info about losing another 10%?

"Morgan Stanley Research estimates the U.S. currency could lose another 10% by the end of 2026.": https://www.morganstanley.com/insights/articles/us-dollar-de...

Re: China is ditching the dollar, fast: Officials believe the yuan has come of age

#29

Post by refurb »

seanmcdirmid wrote: post #20

So is China going to finally let the Yuan fully float and get rid of exchange controls? That's when you know the yuan has really come of age...when you don't need special documentation to convert your yuan into dollars or euros. But something really needs to replace the petro dollar, especially as chinese EV and clean energy tech production reduces or eliminates the need for having a petro dollar at all in most of th…

This.

All the talk about about trade or industrial might is pointless if the Yuan isn’t fully convertible and the exchange rate floats.

And China isn’t going to do that any time soon because of capital flight out of China and the artificially low Yuan pumps exports.

Re: China is ditching the dollar, fast: Officials believe the yuan has come of age

#30

Post by refurb »

nine_zeros wrote: post #4

Illuminating article. And if the yuan bonds information is real, it won't even take 4 years for a lot of global finance to move away from the dollar. It might be tough for the US to accept the higher cost of global resources (and thus become a poorer country) but maybe this gradual decline in dollars status is what the administration hopes is the best case.

Move to what exactly?
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