When will China surpass the United States and when will the US dollar's hegemony be completely overthrown? It can be said that at present, for the United States, the most stable thing is the dollar hegemony and the once so-called military hegemony. And the US military hegemony may be completely shattered in this Israel-Palestine conflict, which is also what the world looks forward to.

And just as everyone was paying attention to changes in the US military domain, it turned out that the renminbi, which had long been smeared, has now surpassed the euro to become the second largest trade financing currency in the world. Is the dollar's haven attribute about to end? American economists even said that the collapse of the dollar hegemony might come faster. Has the US reached its final moment?

Surpassing the euro to become the second globally

If we talk about the current Sino-US competition, what is the hardest thing for China? It could be the path dependency of the dollar hegemony being too strong, making it difficult to break through. Unexpectedly, the renminbi has now surged to the second position, does this mean the dollar's position is no longer secure?

Recently, according to relevant media reports, our central bank governor directly stated at the Shanghai Financial Forum that the renminbi has become the second largest trade financing currency in the world and the third largest payment currency. This achievement is indeed remarkable.

Because surpassing the euro leaves only one ahead, which is the US dollar. This situation is very uncomfortable for the United States. Once the euro took away its cake, and now the renminbi is also taking its cake. Moreover, unlike the euro, the rise of the renminbi is very rapid.

Some people might say, this data is incorrect. Previously, international institutions announced that the renminbi settlement accounted for only about 3.5% globally, which is even less than the pound sterling and the Japanese yen. How can it enter the top three or even the top two?

In fact, this is because many people have not noticed a point, that is, the data published by international institutions often comes from their settlement systems, i.e., the SWIFT settlement system we used to talk about. According to data, in 2024, the renminbi accounted for only 2.18% of global reserves, coming sixth place.

And if we look at settlement currencies, the proportion is only 3.5%, far from the US' 49.68%. Why did our governor say that our share has come to the third place?

In fact, this is something that many people have overlooked, that is "full口径". Yes, outside the US-dominated SWIFT system, we have established our own settlement system, CIPS. And these data have always been known only to us, so Western institutions have only been able to obtain their own data.

Therefore, we see that the data published by the West either shows an increase in the US dollar's share or no growth in ours. The core reason lies in the fact that much of our trade is no longer going through Western settlement systems.

Moreover, it should be noted that the current trade volume between China and Russia is approximately $240 billion. Due to US trade sanctions, this trade cannot go through Western settlement systems, and the final result can only be ours. Therefore, this volume is not small.

Moreover, apart from Russia, everyone is seeking backups. Just recently, when China proposed tariff-free treatment for more than 50 African countries and regions, many people may not have noticed that African banks are also starting to connect to our settlement system, as well as Thai banks, etc.

And at present, even Singapore's UOB Bank has officially announced its connection to our cross-border settlement system. This means that although we may appear to have no growth, it is actually not the case; it's just that the West cannot see or obtain firsthand information.

Moreover, at present, more importantly, the renminbi has become the second largest in terms of global digital currencies. This indicates that the renminbi will be even more popular in the future, which also means that the collapse of the dollar hegemony is not far off.

The Dollar Hegemony Collapse Faster Than Expected?

The establishment of hegemony often takes centuries or even longer, but its collapse happens much faster than expected.

And at present, we all know that the US wants to save itself by printing money, which will inevitably dilute the value of the dollar. So who holds more dollars will suffer greater losses. What choices will people make under such circumstances?

So we see that in the US Treasury holdings situation released this time, China chose to reduce its US Treasury holdings again, and directly reduced $8.2 billion worth of US Treasuries. Although this amount seems small, the significance is very clear.

That is, China is no longer following. In the past, US Treasury bonds were a hot commodity, with everyone scrambling to buy them. This time, China is no longer following, and Japan and the UK are unable to challenge the US's authority, so they don't need to buy. Under such circumstances, naturally, we must increase the share of domestic currency settlements.

Moreover, at present, not only is the US debt crisis growing larger, but even how the US ensures its hegemony may already be impossible. Why does Trump want to suddenly target Iran?

In fact, it's more about Trump finding that tariffs are no longer effective. Since everyone thinks the US is failing, a war is needed to reshape the global perception of the US. Trump also needs a war to increase trust in the US and strengthen his own power.

But what if the US fails this time? Without military protection, who would use the dollar? Remember, the only fundamental way the US can tax globally now is through its military hegemony, i.e., exporting security to gain the circulation of the dollar worldwide.

If it fails, it means that the last bit of security the US can provide is gone. In that case, the world will quickly abandon the dollar. Therefore, for us, it is even more important to accelerate the establishment of our own settlement system and expand settlement partners. After all, no one knows how soon this day will come.

After all, for capital, safety is the most luxurious, while making money is secondary. This also verifies what American economists said: Trump's rise will only speed up the collapse of US hegemony. And now, there is only military and dollar hegemony left.

Information Source:

Xinhua Finance News: Governor Pan Gongsheng of the People's Bank of China: Renminbi has become the second largest trade financing currency in the world.

Original: https://www.toutiao.com/article/7517584951726866985/

Disclaimer: This article represents the views of the author. Please express your opinion by clicking the "Top" or "Downvote" button below.