OPINION_ The Yuan Will Not Replace the Dollar Any Time Soon, If Ever

THE EPOCH TIMES

The Yuan Will Not Replace the Dollar Any Time Soon, If Ever

Though Beijing would like to see the yuan supplant the dollar as the world’s premier international currency, China’s currency faces a steep uphill battle.

A Chinese bank worker prepares to count U.S. dollar bills and a stack of 100 yuan notes at a bank in Hefei, Anhui Province, China, on March 9, 2010. STR/AFP via Getty Images

By Milton Ezrati
5/19/2025 Updated: 5/19/2025

Commentary


For some years now, financial media have speculated about when China’s yuan will replace the U.S. dollar as the world’s premier international currency—what bankers and currency traders refer to as the “global reserve.”

Beijing has made no secret of its desire to see this happen, even declaring at times that it is inevitable. Now, facing delicate trade negotiations with Washington, Chinese authorities have downplayed such ambitions—and well they might, for the sake of the negotiations, to be sure, but also because the possibility, far from being inevitable, has always been far-fetched.

As an export-oriented economy in which sales to the United States account for 3 percent of the country’s gross domestic product (GDP), Beijing knows that China’s prosperity is much more vulnerable to Sino–U.S. trade than American prosperity is. Private analysts estimate that this trade involves some 16 million Chinese workers. With this much at stake and economic troubles to worry about, China’s trade negotiators have no desire to antagonize their American counterparts with triumphant declarations on currency matters.

More fundamentally, Chinese authorities know—or should know—how very far the yuan is from achieving global reserve status. To be sure, the U.S. economy and the dollar no longer have the overwhelming dominance they once did. That is clearly a consideration that every nation on Earth has taken into account.

Even so, no other currency—especially the yuan—has the necessary characteristics to take the role over from the dollar. What may make Beijing even less eager to tout the yuan as a dollar replacement is the realization that the yuan could only gain the necessary characteristics to supplant the dollar if the Chinese Communist Party (CCP) becomes willing to ease the tight financial and currency controls that it otherwise treasures and is not likely to surrender.

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