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China: The Emergence of the Petroyuan and the Challenge to US Dollar Hegemony

Published online by Cambridge University Press:  14 March 2025

John A. Mathews  and
Mark Selden
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It has long been a goal of the Chinese leadership to see the national currency, the yuan, play a greater role in international finance. The internationalization of the yuan has been pursued through many initiatives and strategies, most recently in relation to the IMF and the inclusion of the yuan in a “basket” of currencies underpinning Special Drawing Rights. Internationalization has doubtless been delayed by relative non-convertibility and China's state-run financial system, amongst other factors. As matters are liberalized on the financial front, so it becomes more credible for the yuan to play the global role that would be expected of the currency of the world's largest trading nation, the world's largest manufacturing nation, and the world's second largest economy. But the year 2018 has seen a dramatic break with this SDR-focused strategy, and its replacement by a strategy that targets the oil market – the world's largest commodity market, where trading in US dollars has been near-universal for decades.

Type
Research Article
Information
Asia-Pacific Journal , Volume 16 , Issue 22 , November 2018 , e4
Copyright
Copyright © The Authors 2018

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