Paul Blustein (“Don’t bet on dollar dethronement”, Opinion, January 30) and Eswar Prasad (“Requiem for the postwar order”, Books, January 31) are correct in arguing that the demise of the dollar as the preeminent global currency is not imminent. The role of the renminbi in international transactions and official reserves is trivially small compared with that of the dollar. Also, the renminbi cannot take off as an international currency unless other countries are able to obtain renminbi through trade with China. This is difficult if China continues to run massive trade surpluses — reportedly $1.2tn in 2025.
But both authors underestimate President Donald Trump’s detrimental influence on the dollar as a safe haven and China’s resentment about the advantage gained by US borrowers from dollar dominance.
China, as always, plays a long game. The longer-run solution to the objective of providing renminbi to other countries for trade and settlement is foreign direct investment — that is, swapping renminbi for real assets in other countries.
This strategy has other important advantages: the acquisition of strategic assets (including critical mineral resources), an alternative to increased reserve holdings of US Treasury paper, and enhanced global influence.
China’s Belt and Road Initiative, launched more than a decade ago to invest in infrastructure projects abroad, is an important element in its foreign investment strategy.
It covers 150 countries, and has amounted to $1.4tn since its start,
with the annual flow rising to $213.5bn in 2025.
So don’t bet on the renminbi dethroning the dollar soon. But don’t bet on sustained dollar dominance over the longer term.
Leslie Lipschitz
Boston, MA, US
