China 'Counters U.S. Dollar Hegemony' With Gold Reserves, Yuan Currency Swap Deals

China 'Counters U.S. Dollar Hegemony' With Gold Reserves, Yuan Currency Swap DealsShow more

Jan. 9, 2023

Geopolitical Economy Report - Ben Norton

China is advancing the global movement toward de-dollarization. Beijing's central bank is boosting its gold reserves while signing currency swap deals in yuan with countries like Argentina, encouraging the use of renminbi instead of US dollars.

China's central bank has taken a series of steps to accelerate the global drive toward de-dollarization, challenging the hegemony of the greenback.

The People's Bank of China is increasing the share of gold in its foreign-exchange reserves, bucking the US dollar, which has for decades been dominant in international central bank holdings.

This January, China also signed an agreement with Argentina's central bank for a currency swap deal, in which Beijing will provide 130 billion Chinese yuan (roughly $19 billion USD) to help Buenos Aires stabilize its currency and economy.

The South American nation said it is "committed to deepen the use of the RMB [renminbi] in the Argentine market for bilateral exchange". (Renminbi is the official name for the Chinese currency, also known as the yuan.)

China's semi-official newspaper Global Times commented that the deal makes it "likely that more Latin American countries will increase the use of Chinese yuan in order to counter the US dollar's hegemony, and strengthen economic ties with China."

These moves show how China is responding to the new cold war that the United States is waging against it.

Concerned that the aggressive sanctions that Washington has already imposed could expand into an all-out economic war, Beijing is decreasing its holdings of dollars in reserves and encouraging the use of its currency in trade with other nations – thereby chipping away at the global reserve currency.

Meanwhile, Russia's central bank has pledged to buy yuan in the foreign-exchange market to hold in its reserves. And Beijing is already purchasing oil from Moscow in its national currency.

Original: https://youtu.be/bdASCjEeJ0I

Sources and more information here: https://geopoliticaleconomy.com/2023/01/08/china-dollar-gold-reserves-argentina-yuan/

Russia dropping US dollar for Chinese yuan – and fast: https://geopoliticaleconomy.com/2022/12/26/russia-us-dollar-chinese-yuan/

IMF admits US dollar hegemony declining, due to rise of Chinese yuan, sanctions on Russia: https://geopoliticaleconomy.com/2022/03/31/imf-us-dollar-decline-china-russia/

How Argentina has been trapped in neocolonial debt for 200 years: An economic history: https://geopoliticaleconomy.com/2022/12/18/argentina-neocolonial-debt-history/

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