Posted on 07/03/2026 7:21:42 PM PDT by SeekAndFind
Chinese planners are once again taking aim at the dollar. On June 17, the governor of the People’s Bank of China unveiled a fresh blueprint to pull the world’s financial streams into the Chinese yuan, including pilot schemes for offshore yuan trading and new swap lines for central banks. Expect the usual chatter about de-dollarization to hit fever pitch ahead of the annual BRICS summit in September in New Delhi, where China and Russia are likely to push for their de-dollarization cause.
Over the past decade, Beijing has made genuine progress in building alternative financial channels across three fronts: trade settlement in yuan, the use of its CIPS mechanism for cross-border clearing and settlement, and the creation of the e-yuan as a central bank digital currency. China’s financial resilience is real, and Beijing continues to pursue its goal of preserving optionality in case its access to Western financial channels is cut off—for example, due to sanctions following an invasion of Taiwan. Yet resilience is not the same as influence; few actors willingly adopt Chinese financial tools. In finance, Beijing is learning the hard way that demand, unlike infrastructure, cannot be built to order.
Take China’s de-dollarization drive—or renminbi internationalization, using the official Chinese term for the yuan. Beijing’s progress in the field is real:
Chinese firms now settle around 30 percent of their trade in renminbi, up from virtually zero just 15 years ago.
Yet measured against total global trade, renminbi use remains marginal, with fewer than 5 percent of transactions settled in the Chinese currency. In fact, renminbi use is almost exclusively confined to transactions involving at least one Chinese firm.
Two reasons help explain why Beijing cannot translate its rising global trade footprint into greater use of its currency.
(Excerpt) Read more at foreignpolicy.com ...
Dear FRiends,
We need your continuing support to keep FR funded. Your donations are our sole source of funding. No sugar daddies, no advertisers, no paid memberships, no commercial sales, no gimmicks, no tax subsidies. No spam, no pop-ups, no ad trackers.
If you enjoy using FR and agree it's a worthwhile endeavor, please consider making a contribution today:
Click here: to donate by Credit Card
Or here: to donate by PayPal
Or by mail to: Free Republic, LLC - PO Box 9771 - Fresno, CA 93794
Thank you very much and God bless you,
Jim
.
Well the dollar index just broke higher out of a lengthy sideways range.
Chinese capital controls are one reason, de-dollarization is going nowhere. Beijing’s restrictions on the use of the renminbi outside China make it costly and impractical for foreign firms to source and hold the renminbi that they would need to pay Chinese suppliers.
Maybe when enough fools vote for them, the "Democratic Socialists" will replace the dollar with it.
despite efforts by the BRICs etc to de-dollarize, the $US actually gained transaction share compared to 2022.
The euro was the biggest loser.
https://www.bis.org/statistics/rpfx25_fx.htm
I have not seen the DSA address the Federal debt. Bernie wants to tax those holding the $8t assets at 5% but if my math is correct that is only $400B. Our debt is over $800b this year. Would the DSA be concerned about Fed res auctions?
100.0 is considered to be a neutral value.
I have forgotten the exact reasons for the sudden Trump weakness - in January 2025.
The US Dollar - during the last two Biden years - bounced off the 100.0 range six times.
The Trump Dollar is currently trading at 100.6, a fraction above neutral.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.