this post was submitted on 24 Jul 2023
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I don’t know why we’d be surprised. If you outsource everything to China eventually that will be so much money they get to pick payment methods.
It is because the West sanctions and freezing the money of Russia triggered fears of the same in the Global South, so dedollarisation is happening. Countries are looking for alternatives to not fall in the weaponisation of the dollar, there was a recent article by a former CIA advisor talking about this I will try to link it.
"Countries" - Russia, China, India
Yes they're worried about weaponization of the dollar, and they should be, but they aren't going to succeed long term trying to avoid it.
Russia is just straight fucked at this point. It's economy hasn't been great for ages, and this war is just going to leave them living as an amputee afterwards. It's the same size as a Canada economically at this point...
China is on the edge of a major economic decline. In the last couple of years the last of their population boom just entered the workforce, and now there are significantly more people aging out of the workforce than joining it (and it will be that way for at least 20 years even if they managed to turn their birth rates around today. The results of their one-child policy coming home to roost. They're trying to strike while their iron is hot right now. This is all on top of the fact that their large population is becoming less and less relevant economically due to technology.
India is simply too far behind, it's barely 1.5x the GDP of Canada at only 3 trillion, despite having 35 times the population.
https://www.bloomberg.com/news/articles/2023-07-17/india-indonesia-plan-local-currency-trade-fast-payments-links https://ca.sports.yahoo.com/news/india-ties-uae-settle-trade-114534898.html https://archive.is/K279M https://www.al-monitor.com/originals/2022/07/iran-says-us-dollar-officially-ditched-trade-ally-russia https://www.reuters.com/world/americas/what-brazil-argentinas-currency-union-really-means-2023-01-23/ https://en.mercopress.com/2023/07/04/argentina-insists-on-local-currency-agreements-within-mercosur https://www.tbsnews.net/bangladesh/bangladesh-diversifies-trade-currency-transactions-begin-rupee-663326
Indonesia, UAE, Argentina, Brazil, Iran, Bangladesh, Sri Lanka, etc. While these countries are not actively 100% ditching the dollar right now the simple fact that they are starting to use alternatives speaks of a trend. And we still need to wait for the BRICS to release their plans on their currency, after which the process will accelerate more. It is not only 3 countries, and it is, in my opinion, not so important how much economic power they have, but rather that the strength of the dollar lies in its universal use.
People have been saying this for over a decade. It hasn't happened. Heck, Gordon Chang's entire career is based off writing a "China is about to collapse" book every couple years. If anything, their economic position has continued to strengthen.
2023 is literally the first year that China's population is expected to actually decrease. While this won't immediately collapse the economy or similar it's very difficult to continue economic growth while they're projected to be losing around 600 million people over the next 80 years. The industries they're known for all require cheap labour, which is not something that happens in a tight labour market.
They're going to have to focus on transitioning into higher value industries, but the level of education simply isn't there to do this successfully. Only 8% of working age Chinese people have a bachelors degree, and less than 1% have a Masters or Doctorate. As of 2023, more than 50% of working age Americans have a college degree, and 12% have a masters or better.
https://www.macrotrends.net/countries/CHN/china/population
The global south has been dealing with the downside of dollar hegemony for decades. It's not like people suddenly got afraid due to recent sanctions. This ball has been rolling for decades.
I agree, but that certainly accelerated it, one thing is to sanction a small island or third world country and another one is to sanction a country like Russia, the message is different. If it was Russia's turn it could be Saudi Arabia's next, or whomever.
Russia is special in the West and I don't think anyone has any illusions about that. No one except maybe China is comparable to Russia as the ebil spoopy bad guyz
Not really, this has more to do with its size and the fact that they're forcing themselves on a desperate Russia.
Trade with Russia is not %50 of China's trade. It's much less than that.
This is de-dollarization in motion.
Nobody said it was, but Russia is a major oil supplier to them, it used to be done in US dollars but given the current situation China has been able to force them to use the yuan. Its not like theyre able to pull this off against the major western countries. A lot of their previous yuan based trade was with Hong Kong, North Korea, etc.
And now it's %50 of their trade.
Sure, the undermining of the most advanced economy in the history of the world only started happening since the US started putting sanctions on Russia. Nothing to do with the preceding decades.