China’s trend towards de-dollarisation and the role of the EU

Following the war in Ukraine and the increasing weaponisation of the dollar by the United States, China has stepped up efforts to increase the renminbi’s share in trade financing, international monetary transactions, and foreign exchange reserves. The aim is not only to facilitate Chinese outbound investment and lower transaction costs, but also to make the renminbi one of the main currencies for global trade and finance. It is meant to put limits on the role of the dollar in the international monetary system and allow Beijing to create an alternative financial structure for payments which could prove essential in case of Western sanctions imposed on China following an eventual disruptive move against the international order, like the invasion of Taiwan or the active selling of arms to Russia. [...]