By PulseDaily – Shanghai, June 18 2025
China’s top monetary official sketched out a new vision for global finance on Wednesday—one in which several heavyweight currencies share billing instead of ceding dominance to the U.S. dollar.
Without naming the dollar directly, Pan Gongsheng, governor of the People’s Bank of China, warned that tying the world economy to a single nation’s money leaves everyone vulnerable to that country’s fiscal missteps and regulatory lapses. Such dependence, he said, can “spill over into worldwide financial risk, even triggering a crisis.”
Pan’s remarks, delivered at Shanghai’s Lujiazui Forum—China’s annual gathering of financial power brokers—come as Beijing intensifies a long-running campaign to chip away at U.S. monetary primacy. They also land as Washington signals comfort with a softer greenback: the dollar has dropped roughly 11 percent against the euro this year, a move that helps U.S. exports but could lift federal borrowing costs.
China keeps its own currency, the renminbi, loosely hitched to the dollar. As the dollar sags, the renminbi follows—making Chinese exports even cheaper in Europe and elsewhere. Yet despite incremental gains, the renminbi still plays a bit part in global commerce, far behind the dollar and euro.
Pan argued that any country at the center of world finance will, sooner or later, try to “weaponize” its currency during geopolitical disputes—a thinly veiled swipe at U.S. sanctions on Russia, Iran, and North Korea, three nations Beijing trades with heavily. He touted new payment rails, including China’s digital renminbi, as tools to ease cross-border trade without passing through dollar-denominated channels that rely on decades-old banking procedures.
Analysts note that China’s vast—and growing—trade surplus means renminbi flowing abroad often return quickly to pay Chinese exporters or service debt. Beijing also keeps strict capital controls, limiting foreigners’ ability to park wealth in renminbi assets. Those rules help prevent capital flight by Chinese households but make the currency less attractive as a long-term store of value.
“China isn’t globalizing the renminbi so much as regionalizing it—embedding the currency in trade and state-to-state deals across the Global South,” said Dan Wang, a China specialist at Eurasia Group.
Neither Pan nor Shanghai party chief Chen Jining mentioned the stumbling housing market that has eroded consumer wealth. Property prices in many cities have fallen 30–50 percent since Beijing pricked a years-long speculative bubble in 2021, suppressing household spending. While retail sales rose 6.4 percent in May—buoyed by government subsidies on home appliances—broader consumer sentiment remains fragile.
Even so, state banks have funneled credit into strategic sectors like electric vehicles and solar panels, a priority Chen highlighted in his opening address.
Convincing the world to embrace a multi-polar currency regime will require Beijing to loosen capital controls and build deeper trust in the renminbi—moves that could conflict with its impulse to manage economic shocks tightly at home. For now, Pan’s blueprint underscores China’s determination to whittle away at the dollar’s unrivaled influence, one trade deal and digital payment experiment at a time.
Leave a Comments