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Bid to challenge US dollar heats up: China (Sydney Morning Herald, The Age)

Press/Media: Expert Comment

Description

Quoted as a Macquarie Business School economist on the internationalisation of the yuan and the erosion of US dollar dominance in trade settlement. Assessed the commercial logic driving the shift — that yuan settlement follows naturally from heavy bilateral trade exposure to China — and identified the consequence for sanctions efficacy, arguing that where alternative payment pathways and interbank transfer channels can be established, financial sanctions lose much of their force.

Subject

Renminbi internationalisation, alternative payment systems and the effectiveness of financial sanctions in energy and commodity trade.

Period29 Apr 2023

Media contributions

1

Media contributions

  • TitleBid to challenge US dollar heats up: China (Sydney Morning Herald, The Age)
    Degree of recognitionNational
    Media name/outletSydney Morning Herald and The Age
    Media typePrint
    Country/TerritoryAustralia
    Date29/04/23
    DescriptionThis article examines China's campaign to shift bilateral trade and commodity settlement out of the US dollar and into the yuan, documenting agreements with Argentina, Brazil, Bangladesh, Pakistan, Russia and the United Arab Emirates, together with Saudi Arabian and Iranian openness to renminbi-denominated oil pricing. It identifies three conditions distinguishing the current push from China's unsuccessful 2011–2015 attempt: digital payment infrastructure permitting large encrypted settlement outside SWIFT, deepening geopolitical division, and dollar cost pressure on developing economies. Dr Lurion De Mello comments on the commercial rationale, noting that yuan settlement follows sensibly from heavy trade exposure to China, and on the strategic implication that sanctions lose much of their effect where alternative trade and interbank pathways can be sustained. The piece sets this against caution from the European Central Bank president that international currency status can no longer be assumed, the US Treasury Secretary's acknowledgement that sanctions use itself generates demand for alternatives, and analysis from the University of Sydney noting that yuan trade financing remains concentrated in natural resources and small relative to dollar volumes, with the currency's share of global reserves at roughly 3 per cent.
    Producer/AuthorEryk Bagshaw
    URLhttps://simsrad.net.ocs.mq.edu.au/login?url=https://www.proquest.com/newspapers/bid-challenge-us-dollar-heats-up/docview/2807002148/se-2?accountid=12219
    PersonsLurion De Mello
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