China's reluctance to fully de-dollarize and embrace the yuan as a reserve currency.

1 min read
Source: Business Insider
China's reluctance to fully de-dollarize and embrace the yuan as a reserve currency.
Photo: Business Insider
TL;DR Summary

China may not be fully supportive of making the yuan the reserve currency of choice, as Beijing is unwilling to open its capital accounts or to run a deficit. China is likely to pursue its sphere of currency influence among countries it trades with actively, such as Asia, breaking up US dollar dominance in parts of the world instead. The US dollar's position and clout as a reserve currency comes at a cost, a current account deficit for America, which China cannot afford to run.

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