November 26, 2020
A Financial Alliance Won’t Help China and Russia Dethrone the US Dollar
Since 2014, China and Russia have sought to drastically reduce their reliance on the U.S. dollar to mitigate the impact of any U.S. coercive economic action against them. The two countries want to create a new alternative financial system outside the oversight of the United States, which has jurisdiction – and power – linked to every user of dollars in the world. Nonetheless, the deck is stacked against Russia and China’s goal.
The U.S. dollar has the incumbent advantage in facilitating global trade.
Notwithstanding their progress in de-dollarizing bilateral trade, China and Russia are unlikely to succeed in building a global de-dollarized coalition to avoid sanctions. This is because the U.S. dollar has the incumbent advantage in facilitating global trade. The dollar is also more stable than the Chinese renminbi (RMB) and Russian ruble, and China-Russia relations are not as strong as they appear.
Read the full article in The Diplomat.
More from CNAS
-
Sharper: Trump 2.0
Commentary
Donald Trump's return to the White House is widely expected to reshape America's global priorities. With personnel choices and policy agendas that mark a significant break fro...
By Charles Horn & Gwendolyn Nowaczyk
-
Disorderly Conduct
Reports
The United States must develop a strong, pragmatic strategy for advancing its economic and security interests within the U.S.-China economic relationship, accounting for the f...
By Emily Kilcrease & Adam Tong
-
No Winners in This Game
Video
Watch...
-
Outbound Investment Controls in a U.S. Economic Security Strategy
Congressional Testimony
This testimony addresses the national security risks that can arise from certain U.S. investments in China and other countries of concern....
By Emily Kilcrease
