As China is gearing up to grab global financial hegemony from the United States, the world has witnessed its breakthrough in a recent development.
The unexpected 3% depreciation of the renminbi on May 3 shocked the whole world, resulting in turmoil in global financial markets, a sign that China’s economic clout has surpassed that of the US, Japan and European countries and that the renminbi is more influential than the US dollar, euro, Japanese yen and British pound.
In 2009, however, China launched its campaign to seize the world’s financial power from the US by asking the IMF to reconstruct its board of directors and calling for the setting up of a BRICS Development Bank to dilute the influence of the US, Japan and European countries in the movement and transfer of the world’s capital.
At the same time, China has been engaged in expanding its investment in Africa, the Middle East, South Asia and West Asia. After eight years of efforts, it has succeeded in changing the so-called “petro dollar” to the “petro renminbi” after Xi Jinping and Li Keqiang came to power in 2013.
This means that before 1980, the “petro dollar” had been denominated 100% in US dollars. But now in 2015, 70% of it is calculated in renminbi.
This explains why a 60% of depreciation of the yen by Japan over the past three years has not caused an impact in the global monetary system or in any regional market. In stark contrast, the slight 3% devaluation of renminbi from Aug.11-13 has stirred up a “world-class” tumult.
Under the current framework of multinational world bodies, the US still retains the position as the world’s No. 1 financial entity, but China’s strength has actually caught up with that of the US in the “virtual world.”
Full article: China on par with US in economic influence, says expert (Want China Times)