Are Russia and China already instituting the end of the U.S. dollar as the reserve global currency and the rise of China’s yuan as its replacement? Will the petrodollar soon be replaced by the petroyuan? That seemed to be what Russian President Vladimir Putin was speaking of during a meeting with Chinese Communist Party (CCP) dictator Xi Jinping.
In a clip circulating on Twitter, Putin announced that the Russian government supported the use of China’s yuan for deals between Russia and countries in Asia, Africa, and Latin America. The English translation of Putin’s remarks:
National currencies are increasingly being used in mutual trade. This practice should be further encouraged, and the mutual presence of financial and banking structures in our countries’ markets should be expanded. Already two-thirds of trade between our countries is done in rubles and yuan. We are in favor of using the Chinese yuan for settlements between Russia and the countries of Asia, Africa, and Latin America. I am confident that these forms of settlement in yuan will develop between Russian partners and their counterparts in third [sic] countries.
#Putin: We are in favor of using the #Chinese yuan for settlements between Russia & countries of Asia, Africa & Latin America
Already, two-thirds of trade between our countries is done in rubles & yuan.
This is big for China. Yuan is new reserve currencypic.twitter.com/P70DFjNLA7
— Indo-Pacific News – Geo-Politics & Military News (@IndoPac_Info) March 21, 2023
It’s no secret that the CCP’s ambition is to replace the dollar as the world’s reserve currency. In a February 2023 propaganda report from the CCP Foreign Ministry, called “US Hegemony and Its Perils,” the CCP specifically slammed an “international monetary system centered around the U.S. dollar.” The CCP insisted this allows America to coerce “other countries into serving America’s political and economic strategy.”
Perhaps the most accusatory sentences from the report are, “The hegemony of U.S. dollar is the main source of instability and uncertainty in the world economy…America’s economic and financial hegemony has become a geopolitical weapon.” The CCP jeered that the United States of America became “the United States of Sanctions.” It’s CCP propaganda, of course, but one fact is clear from the report—the CCP is determined that the U.S. dollar no longer be the international reserve currency.
Sure, back in 2021 China claimed its digital yuan wouldn’t replace the dollar, but the CCP is Marxist—it lies all the time. And it’s clear from the above Foreign Ministry quotes that the rhetoric has changed. China might not have explicitly announced that it wants the yuan to replace the dollar (though it did push for the yuan to replace the dollar in oil deals), but it has explicitly said that the U.S. dollar should no longer be the international reserve currency. And it’s ridiculous to imagine that the CCP would prefer any currency other than its yuan to become the dollar’s replacement. Unfortunately, Putin seems willing and eager to forward the CCP’s goal—for now.
And he’s not the only one. The BRICS nations (Brazil, Russia, India, China, and South Africa) announced last year that they were working on a new global reserve currency. Want to bet China plans for that currency to be the yuan?
The yuan has not replaced the U.S. dollar yet. But if the current trend continues, that replacement might well become a reality.