Chinese experts have called on the leaders of BRICS (Brazil, Russia, India, China and South Africa) countries to consider countering the dollar, whose global hegemony is seen as humiliating. Nevertheless, experts agree that any attempt to reduce the dominance of the dollar will take time.
BRICS countries’ dependence on US-dominated global financial system
A report said Chinese experts have urged BRICS countries, such as Brazil, Russia, India, China and South Africa, to counter the global dominance of the dollar, which is now being misused by the United States government. According to experts, BRICS countries can achieve this by enhancing trade ties and limiting their dependence on a financial system that is dominated by the US dollar.
As reported in a Global Times report, the call by experts was made just before a virtual meeting of foreign ministers of five countries was held on May 19. In the meeting, foreign ministers were expected to increase solidarity, discuss construction. consensus, as well as giving emerging markets a greater voice in global governance.
Making the case against the BRICS countries’ continued reliance on the US-dominated financial system, one of the experts, Cao Yuanzheng, President of BOC International Research, claimed that the United States prioritizes only its domestic needs and is concerned about the possible consequences. I am less concerned. of its policies. Yuanzheng said:
International transactions and financial markets, dominated by the US dollar, have shown growing internal contradictions as Washington’s policies place domestic needs first rather than international needs.
US dollar neutrality
The expert said that the recent approval of Russia, as well as the prior freeze of foreign exchange and gold reserves by the United States government, mean that the US dollar is no longer a neutral currency. Meanwhile, the report implied China’s yuan currency, which is popular in countries and regions along the routes of the Belt and Road Initiative, could be an alternative to the dollar. Therefore, an agreement between the BRICS countries could potentially result in increased use of the yuan in some regions, the report said.
However, other experts interviewed by the Global Times warned that it would take time for the US dollar’s dominance to ease. A similar sentiment was recently expressed by the former governor of China’s central bank, Zhou Xiaochuan. Xiaochuan has previously warned that reducing the dollar’s dominance will also depend on whether businesses and the public are prepared to abruptly abandon the currency they have been using for a long time.
Tian Yun, a former vice president of the Beijing Economic Operations Association, suggested that the yuan is likely to take the position of the US dollar as the main settlement currency depends on the confidence of other countries in China’s progress.
Still, another expert, Zhou Mahua, a macroeconomic analyst at Everbright Bank, spoke of the increasing role of the Chinese currency in global payments, settlements and foreign exchange reserves in the long term.
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