China is seizing an opportunity to challenge American dominance in global finance and exert greater international influence at the expense of the all-powerful US dollar.
Geopolitical uncertainty – driven in large part by President Donald Trump’s often chaotic economic policy – has gripped markets in recent weeks, with the dollar falling to four-year lows. Meanwhile, investors are flocking to safe-haven assets, driving gold prices to record highs of more than $5,500 an ounce. That’s given China an opening to promote its own currency as a viable alternative.
Over the weekend, the flagship ideology journal of China’s Communist Party published remarks from President Xi Jinping that outlined plans to turn the renminbi into a global reserve currency. That’s the role the US dollar currently plays – the go-to currency for the vast majority of foreign transactions, making it one of the world’s safest investments.
No one expects that to change anytime soon. But the steep decline in the dollar’s value since Trump took office again last year has at least opened the door to potential challengers.
According to the journal Qiushi, Xi told government officials that China should aspire to establish “a strong currency widely used in international trade and foreign exchange,” with a “powerful central bank” and the ability to attract investment and influence global pricing.
The Chinese leader’s comments were made privately in 2024. The party publicized them as China is positioning itself as a more reliable economic and political partner than the US – and starting to see results. Here’s what we know.
Why do China’s plans matter now?
China has spent over a decade trying to integrate the renminbi into international markets and ensure its stability as a global currency. But China has recently begun reaping the benefits of growing concerns over US economic policy and a trend known as “de-dollarization.”
Trump’s decision to impose several rounds of tariffs on major trade partners has undermined confidence in economic growth in the US and the value of its currency. A change in leadership at the Federal Reserve – for which Trump has nominated Kevin Warsh after repeatedly clashing with current chair Jerome Powell – has added to the uncertainty around US monetary policy and interest rates.
China's leader Xi Jinping speaks next to France's President Emmanuel Macron (unseen) during a joint press conference at the Great Hall of the People in Beijing, China on December 3, 2025. — Adek Berry/Pool/Getty Images
China’s leader Xi Jinping speaks next to France’s President Emmanuel Macron (unseen) during a joint press conference at the Great Hall of the People in Beijing, China on December 3, 2025. — Adek Berry/Pool/Getty Images
Investors have been reducing exposure to the dollar since as early as last year, and European Central Bank President Christine Lagarde has called for the euro to take on a larger role in global finance. The threat of duties and sanctions imposed by the US has also prompted some nations to look to hedge their reliance on the dollar.