The series of punitive measures taken by the West against Russian financial institutions could have a collateral effect: encourage emerging countries to turn away a little more from the dollar. But also accelerate the rise of the yuan, explains economist Michel Aglietta, scientific adviser at the Center for Prospective Studies and International Information (Cepii). In the book he co-published on April 20, The Race for Global Monetary Supremacy. Sino-American rivalry (Odile Jacob, 304 pages, 24.90 euros, with Guo Bai and Camille Macaire), he explains how China is about to upset the international monetary system.
Sanctions against the Russian central bank could cause other monetary institutions to turn away from the greenback as a reserve currency. Is this the end of dollar hegemony?
The diversification of world foreign exchange reserves has already begun: between 2001 and 2021, the dollar’s share fell from more than 70% to just 59%. The weight of the yuan is still limited, but it is rising at high speed, as a number of countries seek to break out of Western orbit, particularly in Asia. Therefore, the war in Ukraine will undoubtedly accelerate this rise of the yuan internationally and the decline of the king dollar.
In the short term, China will probably be careful not to appear as an immediate and decisive aid to Russia. However, Beijing thinks in the long term. Its objective is to reinforce its autonomy and its independence with regard to the United States, in particular for raw materials and new technologies. However, Russia exports raw materials and rare metals, which are precisely essential to the development of high-tech.
Add to that the gas from Siberia, which Moscow could one day sell to China: there is not yet a connection allowing it but, from a geographical point of view, it would make sense. Beijing knows this and, in the meantime, is continuing to roll out its digital currency.
What role can it play in the rise of the yuan?
China has a head start in this area, since, during the February Olympics, it deployed its e-yuan throughout the country. It is now starting to develop it internationally, with the “mBridge” project, a digital currency platform conducted with Hong Kong, Thailand and the United Arab Emirates, which will allow cross-border payments to be made in real time and at lower cost, because without intermediary.
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