"“But in at least one field - financial competition - the opposite is true. China is stagnating, allowing America to dominate by default,” Ruchir Sharma, chair of Rockefeller International, pointed out in a Financial Times op-ed."
"“The history of the world's previous empires shows that increasing economic clout typically leads to a currency taking a greater share of global reserves,” he noted. “But China's yuan, or renminbi, claims just 2% of central bank assets around the world, even as the Chinese economy accounts for 17% of global GDP.”"
"“Similarly, China commands 15% of global trade, while the yuan is used in only 2% of invoices. By contrast, the dollar accounts for about 58% of global reserves, though that share is slipping, and 54% of trade invoices. Plus, nearly 90% of over-the-counter foreign exchange transactions are in dollars.”"
"“The 'exorbitant privilege' of dollar dominance has long been known, allowing the U.S. to borrow more cheaply than its profligate finances would otherwise allow. The U.S. has also leaned heavily on the dollar to impose financial sanctions-a weapon the yuan can't provide.”"
Trump and Xi ended a summit without major breakthroughs while China achieved its goal of equal footing with the U.S. China’s industrial strength supports export dominance, near-par AI capabilities, and growing military advancement. U.S. challenges include Iran involvement, fracturing alliances, and rising debt, fueling a narrative of American decline. Financial competition shows a different pattern: China stagnates while America dominates by default. Economic clout historically increases a currency’s share of global reserves, but the yuan accounts for about 2% of central bank assets and 2% of trade invoices despite China’s 17% share of global GDP and 15% of global trade. The dollar accounts for about 58% of reserves, 54% of invoices, and nearly 90% of over-the-counter FX transactions, supporting cheaper U.S. borrowing and sanctions power.
Read at Fortune
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