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Business Standard
2 days ago
- Business
- Business Standard
Despite China's ambitions, renminbi in no position to topple dollar
The Donald Trump administration is pushing the United States (US) into uncharted territory in so many ways that it's difficult to gauge where and how things will eventually settle Business Standard Editorial Comment Mumbai Listen to This Article People's Bank of China Governor Pan Gongsheng on Wednesday made a strong pitch for a multipolar international monetary system and warned against excessive reliance on a single currency. The message clearly is to shift away from the dollar-denominated global financial system. China has been consistently trying to project the renminbi (RMB) as an international currency. Six foreign banks announced on Wednesday that they would use China's Cross-Border Interbank Payment System, an alternative to the SWIFT (Society for Worldwide Interbank Financial Telecommunication) payment system. In principle, there is merit in the argument that the world should not rely on one currency
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Business Standard
2 days ago
- Business
- Business Standard
China talks up digital yuan in push for multi-polar currency system
The head of China's central bank pledged to expand the international use of the digital yuan and called for the development of a multi-polar global currency system, where several currencies dominate the world economy. China will establish an international operation centre for e-CNY in Shanghai, People's Bank of China Governor Pan Gongsheng said on Wednesday at the Lujiazui Forum, a high-profile gathering of local and foreign financial industry executives and regulators. The remarks come in the wake of renewed appetite for a global yuan, as international trade tensions sparked by US tariff policies prompt investors to seek alternatives to dollar-based investments. At the same time, China is accelerating efforts to develop financial systems independent of Western institutions, moves that have gained fresh impetus as shifting trade patterns and geopolitical realignments reshape the global economic landscape. "Developing a multi-polar international monetary system will help strengthen policy constraints on sovereign currency countries, enhance the resilience of the system, and better safeguard global financial stability," Pan said. Such a system would pave the way for some currencies to hold sway in their respective regions, lessening reliance on the dollar. Pan expects several key global currencies to coexist in mutual competition with checks and balances in place. Washington's aggressive and chaotic rollout of tariffs has shaken faith in the US currency and other US assets, prompting a broader shift by investors away from the US dollar and towards Asian currencies and the euro. The eroding US dollar appeal also comes amid rising global interest in cryptocurrencies, including stablecoins - a type of virtual currency that is backed by an asset and holds a stable price. GLOBAL YUAN AMBITIONS China has long harboured ambitions for the yuan to be a global currency, similar to the euro or dollar and reflective of the importance of the world's second-biggest economy. But that goal has been hampered by unwillingness to open the capital account, and while there's no sign of that changing, progress on other fronts, where it has gained in places such as Russia and other trading partners, stands to accelerate. On Wednesday, six foreign banks including Standard Bank and First Abu Dhabi Bank agreed to use China's Cross-Border Interbank Payment System (CIPS), the yuan-based international settlement system in future, state broadcaster CCTV reported, a step that further expands the use of yuan in global trade. Pan said that digital technologies have exposed weakness in traditional cross-border payment systems, which are less efficient, and vulnerable to geopolitical risks. "Traditional cross-border payment infrastructures can be easily politicised and weaponised, and used as a tool for unilateral sanctions, damaging global economic and financial order," Pan said. Speaking at the forum, China's foreign exchange regulator vowed to keep the yuan exchange rate basically stable and fend off external shocks and risks. China's ability to counter forex market volatility has improved, said Zhu Hexin, head of the State Administration of Foreign Exchange. Beijing will also further open up its financial market to foreign players, Li Yunze, director of the National Financial Regulatory Administration, told the forum. "Foreign institutions are important bridges and links for attracting investment, talent, and are important participants and active contributors to the construction of China's modern financial system," said Li. China will create a transparent, stable and predictable environment for foreign players and will explore options to open up a wider range of financial areas, said Li. Li added that China's rapidly growing consumer market would also bring more opportunities for foreign institutions.
New Straits Times
3 days ago
- Business
- New Straits Times
China talks up digital yuan in push for multi-polar currency system
SHANGHAI/BEIJING: The head of China's central bank pledged to expand the international use of the digital yuan and called for the development of a multi-polar global currency system, where several currencies dominate the world economy. China will establish an international operation centre for e-CNY in Shanghai, People's Bank of China Governor Pan Gongsheng said on Wednesday at the Lujiazui Forum, a high-profile gathering of local and foreign financial industry executives and regulators. The remarks come in the wake of renewed appetite for a global yuan, as international trade tensions sparked by US tariff policies prompt investors to seek alternatives to dollar-based investments. At the same time, China is accelerating efforts to develop financial systems independent of Western institutions, moves that have gained fresh impetus as shifting trade patterns and geopolitical realignments reshape the global economic landscape. "Developing a multi-polar international monetary system will help strengthen policy constraints on sovereign currency countries, enhance the resilience of the system, and better safeguard global financial stability," Pan said. Such a system would pave the way for some currencies to hold sway in their respective regions, lessening reliance on the dollar. Pan expects several key global currencies to coexist in mutual competition with checks and balances in place. Washington's aggressive and chaotic rollout of tariffs has shaken faith in the US currency and other US assets, prompting a broader shift by investors away from the US dollar and towards Asian currencies and the euro. The eroding US dollar appeal also comes amid rising global interest in cryptocurrencies, including stablecoins - a type of virtual currency that is backed by an asset and holds a stable price. GLOBAL YUAN AMBITIONS China has long harboured ambitions for the yuan to be a global currency, similar to the euro or dollar and reflective of the importance of the world's second-biggest economy. But that goal has been hampered by unwillingness to open the capital account, and while there's no sign of that changing, progress on other fronts, where it has gained in places such as Russia and other trading partners, stands to accelerate. On Wednesday, six foreign banks including Standard Bank and First Abu Dhabi Bank agreed to use China's Cross-Border Interbank Payment System (CIPS), the yuan-based international settlement system in future, state broadcaster CCTV reported, a step that further expands the use of yuan in global trade. Pan said that digital technologies have exposed weakness in traditional cross-border payment systems, which are less efficient, and vulnerable to geopolitical risks. "Traditional cross-border payment infrastructures can be easily politicised and weaponised, and used as a tool for unilateral sanctions, damaging global economic and financial order," Pan said. Speaking at the forum, China's foreign exchange regulator vowed to keep the yuan exchange rate basically stable and fend off external shocks and risks. China's ability to counter forex market volatility has improved, said Zhu Hexin, head of the State Administration of Foreign Exchange. Beijing will also further open up its financial market to foreign players, Li Yunze, director of the National Financial Regulatory Administration, told the forum. "Foreign institutions are important bridges and links for attracting investment, talent, and are important participants and active contributors to the construction of China's modern financial system," said Li. China will create a transparent, stable and predictable environment for foreign players and will explore options to open up a wider range of financial areas, said Li. Li added that China's rapidly growing consumer market would also bring more opportunities for foreign institutions.
Yahoo
09-05-2025
- Politics
- Yahoo
Putin and Xi's meeting marks the start of a dangerous new world order
Xi Jinping's arrival in Moscow, to commemorate Russia's VE day, on May 9, (a day after Europe, the UK and the US), wasn't just a formality. It was a very public and deliberate show of support from Russia's closest ally. We already know that China is a critical part of the 'axis of totalitarian states', made up of China, North Korea, Russia and Iran. The countries in this group, prompted by China, have delivered a great deal of support to Russia in its invasion of Ukraine. This includes a significant number of drones from Iran in the early stages of the war, and now weapons and ammunition from North Korea. It was China that helped arrange the rapprochement between North Korea and Russia, opening the door to huge levels of military support. It is worth remembering that, at that time, Russia was in some difficulty and had begun running low on artillery ammunition and other weaponry. Perhaps the best example of this support is the estimated delivery of over five million artillery shells from North Korea, not to mention the thousands of North Korean soldiers now engaged in fighting alongside Russian troops in the Kursk region. During a recent visit to Ukraine, the Ukrainian military revealed to me that these North Korean troops have proven to be more effective than existing Russian troops. But we should cast our minds back to the Winter Olympics in China in 2022. On February 4 2022, Putin flew in, clearly to discuss the coming invasion with Xi. Just 20 days later, Putin's forces invaded Ukraine. What is absolutely clear is that Russia would not have invaded Ukraine without Xi's agreement. On March 22 2023, at a previous meeting, president Xi gave Putin the strongest level of support when he said: 'Change is coming that hasn't happened in 100 years. And we are driving this change together.' This visit of Xi now re-emphasises this strong alliance between them. After all, the alliance isn't just words, as China now buys a huge proportion of Russia's oil and gas; and in return it supports Russia at the UN. This purchase of Russia's oil and gas has increased dramatically in the year following the invasion. China has also encouraged a network of other nations to do the same. When Russia invaded Ukraine, the West not only froze Russian assets but also cut off Russian financial institutions access from SWIFT (Society for Worldwide Interbank Financial Telecommunication), the backbone of global financial transactions. In response, China immediately stepped in and facilitated financial transactions through its own system, Cross-Border Interbank Payment System (CIPS). This intervention alone saved Russia from a cash flow crisis. What should not be forgotten is that China has its own territorial ambitions in Taiwan. China's support for Russia is also because what happens in Ukraine will have a bearing on what happens in Taiwan. Xi is watching carefully to see how strong the West's resolve is over Ukraine, as this will give him a strong indication of how the US and other elements of the Nato alliance might respond if and when Taiwan is blockaded or invaded. So far, what China has seen from the West has significantly emboldened its position over Taiwan. Since the beginning of this conflict, it has become clear that Europe first and foremost was unprepared for any kind of conflict and unable to support Ukraine as they should have done. Even under president Biden, the US was unable to make its mind up whether it wanted Ukraine to win or just not to lose. This was evidenced by the early refusals to supply F-16 fighter jets to Ukraine and in restrictions on Ukraine's use of US missiles to target sites within Russia. Whilst we all want peace, any deal that trades away significant Ukrainian territory would be manna from heaven for president Xi. As Xi got off the plane in Moscow, he must be smiling to himself as he watches the divisions in the West and contemplates the beginning of a new world order. Broaden your horizons with award-winning British journalism. Try The Telegraph free for 1 month with unlimited access to our award-winning website, exclusive app, money-saving offers and more.
Business Recorder
08-05-2025
- Business
- Business Recorder
‘US dollar dominance being fundamentally challenged'
LAHORE: In a compelling analysis of the rapidly evolving global financial landscape, Zafar Iqbal, Vice President of the Pakistan China Joint Chamber of Commerce and Industry (PCJCCI) stated that the long-standing dominance of the US dollar in international trade is being fundamentally challenged. He attributed this shift to the fast-paced development of digital currency infrastructure, led by China's digital yuan and its cutting-edge Cross-Border Interbank Payment System (CIPS 2.0). According to Iqbal, this innovation signals 'a new financial era characterized by speed, transparency, and a multipolar currency order.' Addressing a strategic roundtable discussion at the PCJCCI Secretariat, he highlighted the landmark execution of CIPS 2.0's first international transaction — a 120 million yuan payment for auto parts, completed in just 7.2 seconds from Shenzhen to Kuala Lumpur. This real-time transaction bypassed traditional banking lags, which typically take up to three business days via the SWIFT system. PCJCCI vice president said that this was not just a quick transfer but it was a financial breakthrough. It marked the rise of a new infrastructure that has the potential to redefine how global economies conduct trade, settle payments, and foster growth. He noted that the expansion of China's digital financial systems represents a transformative shift, challenging traditional frameworks historically controlled by Western powers. For emerging economies, especially those in the Global South, this shift offers an opportunity to reduce dependence on dollar-dominated systems and engage in trade on more equitable and transparent terms. Zafar Iqbal said that this isn't merely about faster payments, it's a systemic shift in how global settlements function cutting costs, boosting trust, and offering developing economies like Pakistan the chance to stand on equal financial footing with the world's major players. He also highlighted three transformative advantages offered by CIPS 2.0 and the digital yuan: Cost Annihilation: Traditional cross-border payments via SWIFT incur high transaction and intermediary fees. With CIPS 2.0, fees are negligible—often less than a dollar—allowing massive savings across global trade. Technological Supremacy: Digital yuan transactions can operate offline and leverage smart contracts to auto-trigger settlements, vastly improving efficiency and eliminating fraud-prone paperwork. Security Innovation: CIPS 2.0 uses blockchain-backed transparency and AI-powered risk monitoring to prevent money laundering in real-time, outpacing legacy systems that rely heavily on delayed manual oversight. He explained how these features not only improve financial reliability but also open up a new era of digital trade—where programmable money, instant settlements, and fraud-proof systems are the standard, not the exception. He warned that countries like Pakistan must not remain passive observers to this transformation. Instead, they should align with this rising ecosystem to unlock new trade opportunities, improve economic resilience, and modernize their financial architecture. 'Digital yuan adoption is expanding exponentially,' he added. 'Pakistan must now act strategically—by integrating with these new rails of commerce, we can future-proof our trade and financial sectors, enhance regional partnerships, and reduce our vulnerability to dollar liquidity shocks.' Copyright Business Recorder, 2025
