The "Renminbi Bloc": China's next step to the end of dollar supremacy
China has quietly taken a huge step toward supplanting the dollar as the world’s reserve currency.
A report from the Peterson Institute for International Economics concludes a “renminbi bloc” has formed in East Asia. That is, since the Panic of 2008, seven out of 10 major economies in East Asia have tracked the renminbi closer than the dollar. That includes South Korea, Indonesia, Malaysia, Singapore and Thailand.
The lone holdouts are Hong Kong, Vietnam and Mongolia.
Indeed the report finds the currency’s influence extending beyond China’s backyard. Turns out the renminbi is now the dominant reference currency in India, South Africa, and Chile.
“China has long vowed to raise its currency’s global sway, along with the rise of its economy, which became the world’s second-biggest last year,” crows a China Daily story summarizing the report.
“There’s been no question whatsoever,” mused Chuck Butler in this space last June, “that the Chinese have gone well down the road to removing the dollar as the reserve currency of the world.
“It will take time, lots of time, but the Chinese have awaken from their slumber, and everything they’ve put their minds to, they’ve accomplished. They wanted to be the biggest exporter, and now they are. They wanted to pass Japan as the second-largest economy in the world, and they did.”