In April, the tariff war initiated by U.S. President Donald Trump caused a financial storm in the global market and triggered concerns about an economic crisis and the credibility of the dollar. Amidst this crisis, on May 17, the 2025 Tsinghua PBC School Global Finance Forum was held in Shenzhen by the PBC School of Tsinghua University. The forum discussed the current economic situation.
During the forum, Observer Network and multiple media outlets were invited to have a dialogue with Marc Uzan, the founder of the Committee for the Renovation of the Bretton Woods System. Mr. Uzan made in-depth analyses on global financial system reform, US Treasury credit, the development of digital currencies, and provided insights into future trends in international finance.
The "Committee for the Renovation of the Bretton Woods System" was founded by Mr. Marc Uzan in 1994. This organization aims to provide a communication platform for high-level economic dialogues and has long been committed to redefining the global financial architecture and monetary system to better cope with the ever-changing economic landscape. With authorization from the PBC School of Tsinghua University, the Observer Network has compiled and fully published this dialogue.
[Written by Marc Uzan, Interview and Compilation by Tang Xiaofu from the Observer Network]
Media: How do you think the Bretton Woods system and its legacy mechanisms have changed during the last economic cycle? In the coming years, which direction do you think the world economy will take? What does the internationalization of the RMB shift represent?
Marc Uzan: I believe we are at a very important turning point in history. Last year marked the 80th anniversary of the establishment of the Bretton Woods system, including the International Monetary Fund and the World Bank.
However, 80 years later, concerns about the sustainability of the Bretton Woods system's institutional framework have emerged. There are two reasons why we need to reform the framework established back then:
Firstly, the international economic structure has changed. We have witnessed China's rise as a superpower in the global economy and the emergence of emerging economies such as Brazil and South Africa. Many emerging countries are dissatisfied with their limited speaking rights in existing international financial institutions and urgently hope to rebalance the Bretton framework system and promote reforms in the global governance structure.
Marc Uzan, Tsinghua PBC School
Secondly, in recent years, countries in the "Global South" believe that the existing Bretton system is monopolized by Europe and America. The Managing Director of the International Monetary Fund has always been appointed by European nationals, while the President of the World Bank has always come from the United States. Therefore, to ensure that global governance institutions have broader representation, institutional diversity must be achieved.
This requires China, as the second-largest economy in the world, to play a more important role in maintaining global financial stability and supporting emerging markets. It also makes China begin to think beyond the existing governance system and actually establish some new systems. On one hand, China has established the Asian Infrastructure Investment Bank and the New Development Bank of BRICS; on the other hand, China has built currency arrangements based on currency swaps between domestic currencies and the renminbi with central banks of various countries and provided dollar liquidity support.
Certainly, many countries are disappointed with the current operation of the Bretton Woods system institutions and their delayed responses to the rise of emerging countries, leading to a decrease in "legitimacy." At the same time, China has become an important participant and economic powerhouse in global governance. Over the past decade, the Asian Infrastructure Investment Bank and the New Development Bank of BRICS have grown significantly.
So, what does all this mean for the future of global governance and the international monetary system? I believe this conference is extremely important, as it has sown the seeds of thought and provides us with a knowledge framework to consider the "next chapter of global governance."
Are we going to continue to uphold multilateralism? Are we going to continue to uphold "rules of the game" beneficial to all members? These rules are extremely beneficial for upholding multilateralism and ensuring that trade and financial activities comply with the rules. However, the United States is now re-examining the post-war international order, believing that it no longer aligns with its own interests and may even run counter to its interests. So how should we respond?
I believe this might be a sign that the global international financial order is being rewritten since World War II. Countries may not only need to rebalance the global economy and change the global governance model but also start thinking about possible scenarios in the future: Will the United States withdraw from the institutions under the Bretton Woods system? Would this lead to the collapse of the traditional international financial architecture and stagnation in the global financial system?
What should other regions of the world do? The world is not ruled by a single country but is truly multipolar. However, the "rules of the game" for this multipolar world have yet to be clearly defined. Therefore, I believe today's meeting provides us with a theoretical framework to think about a more multipolar world, meaning we need to work hard to establish new "rules of the game" for the upcoming multipolarity.
Media: From your analysis of recent U.S. actions, do you think the U.S. will strengthen the global status of the dollar? What impact would this have on other economies around the world?
Marc Uzan: Today, almost everyone is confused about U.S. monetary policy and strategy: Are they trying to keep the dollar as a reserve currency, or are they trying to make the dollar appreciate or depreciate? Considering the constantly changing U.S. tariff policies, everyone feels uneasy.
I believe that U.S. policies lack clarity at present, but it is certain that the U.S. is attempting to rebalance the global economy. This rebalancing process will inevitably have far-reaching impacts on the dollar, the renminbi, and Sino-U.S. relations.
What exactly does this "global rebalancing" refer to? First, we need to understand why the current global economy is so dependent on the U.S. market in terms of trade. Not just China, but many countries have formed a high dependence on the U.S. market, which itself reveals some defects in the global trade system. We have certainly measured the trade imbalances among the U.S., China, and Europe, and there is no doubt that China has a significant surplus.
So, it is indeed a time when the world needs to start discussing and thinking about this issue. We need to find a way to achieve some kind of rebalancing. Perhaps this is the role that the International Monetary Fund played in multilateral monitoring: providing crucial advice to major participants such as eurozone countries, China, and the U.S., striving to rebalance their economies because they will influence the global economy with "warlike" impact. I believe this will have a profound impact on the exchange rates of the dollar, the renminbi, and the euro.
Of course, I believe it is very important that over the past few years, the global economy has suffered multiple shocks, which we call "multiple crises": the pandemic, war, energy crisis, and now the trade war. This series of consecutive shocks has already triggered inflation. A big question at the time was whether this round of inflation was permanent or temporary?
I believe we need to seriously consider the current state of the global economy. Perhaps these tariffs are just a temporary means for the U.S. to pressure its main partners. Therefore, first, we need to understand the situation and stay calm because everyone here faces the challenge of how to alleviate the tensions in the global economy.
But I want to emphasize that this is the moment to rebalance the global economy. For China, it should rely more on domestic demand to drive economic growth; for the U.S., it should increase savings rates and reduce budget deficits due to its excessively high debt levels; and for Europe, it needs to restore competitiveness.
International Monetary Fund
I believe this is feasible, but these goals require consultation and completion by various countries. The International Monetary Fund was established precisely as an international institution to bring key participants together. Of course, people expect the reshaping of the global financial and trade landscape to gradually emerge, but we cannot rely on building trade barriers to achieve this process. Setting up trade barriers is not a positive-sum game; everyone will lose.
Media: Trump's second term has shaped a new international image for the U.S., transforming it from a "rule maker" to a "system disruptor." How do you evaluate the U.S. role in Trump's second term, and what are Europe's views on this? Do you think the U.S. will continue down this path for a long time?
Marc Uzan: I would say that Trump's second term marks a clear divergence of the U.S. self-image from the role of global rule and system guarantor since the end of World War II. The U.S. is no longer seen as a rule maker but more as a unilateral system destroyer, which has had a major impact on its "traditional historical partners."
This change in the U.S. has forced Europe to raise several very important questions. First, can Europe still trust the U.S. and still see it as a stable transatlantic partner? Second, should Europe increase investment in what we call "strategic autonomy," especially in defense, energy, and technology sectors? Third, what measures can Europe take to deal with the unpredictability of U.S. foreign policy?
What has shaped today's U.S.? Why did American citizens choose Trump? I believe there have been some changes in the domestic political ecology of the U.S. But at the same time, the current international system can no longer rely on a single hegemon. We need to balance the U.S.'s "America-centered" mindset because we are moving toward a better world: a world where the U.S., China, and Europe coexist in multipolarity.
For Europeans, we need to restore industrial competitiveness because we have lost it, and Europe cannot afford the cost of the current U.S. behavior. We view the U.S. as the core force in rebuilding Europe after World War II; the post-war revival of Europe depended on the global public goods provided by the Marshall Plan created and implemented by the U.S.; thanks to the U.S., Europe not only helped the world recover but also enjoyed 80 years of predictability, 80 years of peace, and prosperity.
Therefore, from the perspective of Europe and my home country France, it is difficult for us to move forward amidst the disruption of "war"; we are more accustomed to "fighting" according to established rules. To put it simply, Europe has long been investing in multilateralism; accepting the reality of "war returning to the European continent" is indeed very difficult for Europe.
We can hardly imagine acting without peace as a reliance. We must reconsider our budget expenditures: diverting funds intended for carbon neutrality and climate issues to defense. I believe this situation could even affect our identity, as the foundation of the EU's identity is peace, prosperity, and multilateralism, and it participates in international economic activities and exchanges with this identity.
When we talk about setting up trade barriers, "de-risking," "trade wars," "Ukraine," and "the war with Russia," we should all realize that we are facing unprecedented situations in the history of Europe over the past 70 years. We once firmly believed that after World War II, after experiencing two cruel wars, Europe should never have another war. Europe's "great duel" is history, and war in Europe has completely ended.
I believe that European values are not only about multilateralism and rules but also about the value itself, rather than mere power. But now we are in a situation where we must reconsider the existence of powerful nations, which is not the original intention of the EU's establishment.
Media: As a rising major power, China is gradually moving to the center stage of the world. What role do you think China should play on this stage? What role does the West hope China will play?
Marc Uzan: I believe China can no longer be defined simply as a "new participant." China has become a core pillar in the global system, particularly in the global financial architecture. Therefore, the most important question is not whether China will lead but whether China decides to lead the entire system architecture.
China is already a de facto economic giant. When you have such economic strength, you are not only responsible for your own country but also for the whole world. Because everything you do will have a huge impact and spillover effect on other parts of the world. For example, any action taken by China in the economy will affect Latin America because Latin American countries export large amounts of raw materials and commodities to China, leading to a high degree of linkage between China and emerging markets' business cycles. Therefore, whatever measures China takes will have a profound impact on other parts of the world.
So, how should China participate in and change the world economy? We have seen some signals. Looking back over the past decade, China has been the main beneficiary of global economic integration and has used this momentum to create new institutions like the Asian Infrastructure Investment Bank and the New Development Bank. These initiatives have already shown that China intends to become a responsible stakeholder in the global financial system.
At the same time, China also faces domestic economic challenges and needs to find a balance between addressing domestic issues and maintaining global economic stability. Through the Belt and Road Initiative and various policies, China is also becoming an advocate for the Global South.
Marc Uzan speaks at the 2025 Tsinghua PBC School Global Finance Forum, Tsinghua PBC School
So, the core issue is not whether China will lead the world economy but that China is already leading the entire world economy. For the prosperity of the world and global peace, we need China and the U.S. to reach some kind of consensus. The relationship between China and the U.S. needs to be based on coordination rather than confrontation; everything should be based on cooperation. Competition can exist, but we don't want confrontation because it will change the rules followed by other countries in the world.
But I believe the Chinese understand the seriousness of the current situation, and they want to play an important role in building what I call a new multilateralism framework. I believe experts, academia, and policymakers need to work together to advance this process. Because ultimately, both the global economy and humanity face global challenges and common problems, including climate change. Therefore, I think we should focus our efforts and time on major challenges ranging from digitization to ethical artificial intelligence and climate issues, and all should leverage China's innovation capabilities to drive global innovation.
This is my first visit to Shenzhen, and I am deeply impressed by all the major innovations happening in China. Therefore, I believe we should strive to find a way for the two major superpowers, China and the U.S., to reach an agreement because this serves the interests of the global economy. We need to reshape the global financial and trade order for the common good.
Media: Final question: How do you view the Sino-U.S. trade war and the recent "partial reconciliation"? Can this reconciliation last?
Marc Uzan: I believe the joint statement issued in Geneva has sent a signal of de-escalation. And I think President Trump's mindset is entirely centered around "making deals," so imposing tariffs is his preferred method, and he also hopes to meet with President Xi Jinping.
Personally, I think it is necessary for the two countries to sit down and talk. I believe the two sides will always find a solution. From my personal perspective, President Trump wants to make a peace agreement between Ukraine and Russia, and he knows that China can exert pressure on Russia, so he may be willing to strike a deal with China first. This is the first part of the reason why both sides might push for an agreement.
The second part of the reason is that both countries need to address critical issues in times of crisis. China is willing to show that it can control the Sino-U.S. crisis situation and will find various technical means to mitigate this crisis at all costs. I believe this will also happen in the U.S.
The third part of the reason is that China is willing to purchase more U.S. products to rebalance the Sino-U.S. economic trade, which will be the first part of the deal. Then, China and the U.S. can complete technology transfer and rebalancing under the "G20" framework.
It is worth noting that next year the U.S. will assume the presidency of the G20, where the U.S., China, and Europe can gather to jointly formulate a new agreement. Stephen Milano, Chairman of the White House Council of Economic Advisers, has also publicly stated the desire to reach some form of "large-scale agreement" with the U.S.'s main trading partners. Therefore, we need to monitor all these developments. This is a historic moment.
I believe we need to do two things simultaneously: build new rules for multipolarity and enable the two major powers in today's world, China and the U.S., to reach a new agreement.
Media: In the past month, after the U.S. imposed tariffs, the euro and sterling have strengthened against the dollar. What do you think are the reasons? Some also believe that Europe is shifting from a neutral stance to a "geopolitical tool," with influence extending to energy and trade. How do you view this transformation? What role will Europe play in the global monetary system?
Marc Uzan: Over the past few years, Europe has experienced "multiple crises" - the pandemic, war, energy shocks - and has been in a passive response mode. The constant changes in U.S. policies have sounded an alarm for Europe: Europe can no longer regard the U.S. as a "reliable partner." This has profound implications for European security and global security.
At the same time, these circumstances are also pushing Europe's so-called "strategic autonomy" process to accelerate - meaning Europe has become an important force in the trade sector. Germany is a major trading partner of China. The EU has been operating as a common market with clear rules for over thirty years, and perhaps longer. I believe the unintended consequences of this trade war for Europe are roughly as follows:
First, if trade with the U.S. decreases, intra-EU trade will increase because when you start considering supply security, intra-European trade integration will deepen. Now we already have the euro, and the number of eurozone member states exceeds twenty-six.
There are also many people in the UK who are trying to rejoin the EU
Those countries that were previously reluctant to join the euro area, such as Sweden, the Czech Republic, and Poland, may draw the conclusion that they had better join the euro area soon, otherwise they will bear greater risks. The same reasoning applies to Finland and Sweden - these two countries were reluctant to join NATO, but after Russia's offensive against Ukraine, they realized that joining NATO is more advantageous than staying outside it. Therefore, I believe that countries like Sweden, the Czech Republic, and Poland, which are EU members but not part of the euro area, may start considering joining the euro area.
This shows that one consequence of Trump's strategy may be that many European countries will join the euro area. This is not only very important but also highlights the position of the euro as a reserve currency. The EU has not actively promoted the euro as a global reserve currency, but now everything is driven by geopolitics and security considerations. The global economy is driven by geopolitics, not just global market demands. Therefore, we may see further enhancement of the euro's position and acceleration of its progress towards becoming a reserve currency. This is crucial for those countries that wish to join the euro area.
About a year ago, former senior officials such as the former president of the European Central Bank attempted to analyze why Europe's competitiveness had declined and proposed several influential proposals. In my view, the demand for Europe's strategic autonomy will push this process forward. We need to accelerate the concept of the "European Capital Markets Union," which I believe is a very important initiative.
Second, you will see an accelerated growth in European defense spending. Just like during the pandemic, when many European countries borrowed money in the name of the EU rather than as individual countries like France, Germany, or Italy, Europe now also needs to borrow money in the name of the EU on the market because we need funds to support the transition and various expenditures.
Therefore, Europe has much to do at the European level, and I believe this transformation must be accelerated. If we want China or the U.S. to take us seriously, we cannot just be an abstract "EU" but must become a real "union." We need to turn the euro into an international currency, demonstrating our ability to borrow as a whole continent on the European market, not just as individual countries.
Observer Network: After the U.S. initiated the tariff war, the creditworthiness of U.S. treasuries attracted global attention. As the founder of the "Committee for the Renovation of the Bretton Woods System," how do you view the creditworthiness of U.S. treasuries and the risks they pose to the global financial system?
Marc Uzan: During Trump's famous "Liberation Day" and thereafter, the U.S. Treasury market obviously saw a large-scale sell-off. This is because the U.S., as the provider of credit for U.S. treasuries, has become the core of instability in the world economy. As I said before, the U.S. has chosen to become a "destroyer" rather than the country that can bridge the world.
Of course, the cause of this Treasury sell-off includes the unprecedented scale of U.S. debt. We are witnessing rising deficits, and this upward trend continuously sends signals to the market, causing the market to become increasingly uneasy about the U.S. fiscal situation, which will have major impacts in the future.
However, I believe that the events in April may reflect the first reassessment by long-term investors of the role of the dollar as a reserve currency. Investors may have realized that the U.S. may only represent 25% of the global economy, and long-term investors can no longer rely solely on so-called "confidence and predictability" of the U.S. market for investments.
Due to weak Treasury auctions, yields on U.S. treasuries have continued to rise recently
Even though statistics have not yet revealed signs, I believe something historically significant happened in April: people have wanted to diversify their investment portfolios and divest themselves of dollar assets for the first time in decades. So the question now is, where will they redirect their funds? This is also why Europe urgently needs to establish a "Capital Market Union," because the vast majority of European savings still flow to the U.S., which is illogical.
Of course, the U.S. remains a highly competitive economy and remains the center of innovation. But I believe that the current uncertainty and daily disturbances, from the perspective of financial markets, are not only making people reassess the "American Exceptionalism" but also making people no longer view the U.S. as the ultimate safe haven in the global financial market.
I want to further explain that this is the first time since World War II that people are beginning to question the belief that has long been considered a given - "no matter what happens, the U.S. will always be the last safe haven, and people can trust the Federal Reserve and U.S. institutions."
The U.S. may be returning to "normalcy," and people will reassess the U.S. based on macroeconomic fundamentals, debt levels, and other factors. In this way, investors may exert greater pressure on U.S. fiscal reforms. The downgrade of the U.S. rating by Moody's is also sending a signal: the U.S. also needs to get its "house in order."
Observer Network: Second question, in recent years, various cryptocurrencies have gained popularity in the financial market. In your opinion, will Bitcoin and other cryptocurrencies have a negative impact on global financial security? Where will the future of central bank digital currencies go?
Marc Uzan: I believe that over the past few years, we have witnessed a "currency revolution," a revolution in redefining money. Multiple central banks around the world are exploring or experimenting with various forms of central bank digital currencies (CBDC). At the same time, the rise of crypto assets cannot be ignored. However, central banks still maintain a monopoly on currency issuance because it relates to national monetary sovereignty.
Now, we need to think about how the rise of digital currencies will impact the future of the international monetary system. As we have discussed for many years: China is one of the earliest countries to consider and issue digital renminbi, and the EU is also advancing the construction of the "digital euro" in stages. Of course, this requires approval from the European Parliament and member states, but the relevant processes are basically in place.
As for the U.S., the Federal Reserve has clearly stated that due to the impact of CBDCs on the U.S. banking system and consumer privacy, the U.S. government does not intend to issue a CBDC for the U.S., but they are promoting the development of "stablecoins." "Stablecoins" will be issued by several companies and may become the de facto "digital dollar." Although the Federal Reserve does not directly issue a CBDC, as long as customers deposit equivalent dollars into the banks of these "stablecoin" issuers, they can enter the cryptocurrency market.
China's central bank digital currency is progressing
All these actions will have a profound impact on the operation of the international monetary system. We have already seen multiple cross-central bank interoperability tests, such as "mBridge" and "Project Jura" in Asia, attempting to verify the feasibility of CBDCs in cross-border payments. For example, digital currency interoperability experiments between China and Thailand, China and the UAE, and China and Saudi Arabia. And these experiments are being carried out vigorously with the assistance of the Bank for International Settlements.
No matter the final outcome, the digital revolution is reshaping the global economy and will undoubtedly have a significant impact on the international monetary system. If cross-border payments can be fully digitized, will this weaken the dollar's reserve currency status? This is possible because if countries' digital currencies achieve deep interoperability, there will be no need to go through traditional currencies like the dollar or euro for intermediation. For example, direct interoperability between digital renminbi and Thai baht can bypass the intermediary role of the dollar or euro.
I believe we need to closely monitor this process because the pace of innovation is accelerating, and digital currencies could potentially change the way the existing international monetary system operates. At the same time, we must carefully assess their impact on monetary policy, particularly the transmission mechanism of monetary policy in emerging countries.
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