{"id":6590,"date":"2026-05-18T16:44:53","date_gmt":"2026-05-18T16:44:53","guid":{"rendered":"https:\/\/stock999.top\/?p=6590"},"modified":"2026-05-18T16:44:53","modified_gmt":"2026-05-18T16:44:53","slug":"china-will-continue-stagnating-as-an-incomplete-superpower-until-it-can-match-u-s-financial-might","status":"publish","type":"post","link":"https:\/\/stock999.top\/?p=6590","title":{"rendered":"China will continue stagnating as an ‘incomplete superpower’ until it can match U.S. financial might"},"content":{"rendered":"

<\/p>\n

President Donald Trump\u2019s summit with Chinese counterpart Xi Jinping ended last week without a major breakthrough, but still achieved Beijing\u2019s goal of putting itself on equal footing with the U.S.<\/p>\n

Meanwhile, China\u2019s industrial might continues to drive export dominance, its AI is nearly on par with the top models, and its military is increasingly advanced. <\/p>\n

With the U.S. bogged down in Iran, alliances fracturing, and debt soaring, the narrative on America has pointed in the opposite direction, namely a superpower in decline. <\/p>\n

\u201cBut in at least one field \u2014 financial competition \u2014 the opposite is true. China is stagnating, allowing America to dominate by default,\u201d Ruchir Sharma, chair of Rockefeller International, pointed out in a Financial Times op-ed.<\/p>\n

The history of the world\u2019s previous empires shows that increasing economic clout typically leads to a currency taking a greater share of global reserves, he noted.<\/p>\n

But China\u2019s yuan, or renminbi, claims just 2% of central bank assets around the world, even as the Chinese economy accounts for 17% of global GDP. Similarly, China commands 15% of global trade, while the yuan is used in only 2% of invoices. <\/p>\n

By contrast, the dollar accounts for about 58% of global reserves, though that share is slipping, and 54% of trade invoices. Plus, nearly 90% of over-the-counter foreign exchange transactions are in dollars.<\/p>\n

Sharma estimated that the world\u2019s second largest economy is running 30 to 40 years behind the historical trajectory of superpowers. This lag is also notable given how much global finance has exploded, with the value of financial assets quadrupling over the last five decades.<\/p>\n

Federal Reserve<\/p>\n

The \u201cexorbitant privilege\u201d of dollar dominance has long been known, allowing the U.S. to borrow more cheaply than its profligate finances would otherwise allow. The U.S. has also leaned heavily on the dollar to impose financial sanctions\u2014a weapon the yuan can\u2019t provide.<\/p>\n

\u201cChina will remain an incomplete superpower until it can match this financial firepower,\u201d Sharma wrote. \u201cFor decades, it has kept its financial system more tightly sealed than any other major nation.\u201d<\/p>\n

As a result, foreign investors own less than 5% of the stocks and bonds in China, while capital controls have largely bottled up a massive surge in domestic money supply, he added, describing Chinese markets as a \u201clocal prison.\u201d<\/p>\n

Beijing is afraid capital will flee the country if restrictions are relaxed, but investors won\u2019t see China as safe until the yuan is traded more freely, Sharma said.<\/p>\n

To be sure, China is trying to make the yuan a more international currency. It\u2019s being used in the oil trade more often, and the Iran war has led to speculation that the \u201cpetrodollar\u201d could give way to the \u201cpetroyuan.\u201d<\/p>\n

In addition, use of the yuan among global central banks is up lately. By the end of March, the People\u2019s Bank of China had provided $16.4 billion via foreign-exchange swap lines, the most in two years and the steepest quarterly increase in three years.<\/p>\n

Signaling how seriously the U.S. views currency swaps, Treasury Secretary Scott Bessent recently suggested swap lines can help reinforce the dollar\u2019s dominance and reserve status.<\/p>\n

Elsewhere, the yuan also advanced in world rankings by one rung to become the fifth most active currency in global payments, according to the SWIFT financial platform.<\/p>\n

Still, Sharma thinks China must loosen up more, adding that less strict controls can actually encourage capital inflows rather than an exodus.<\/p>\n

\u201cWithout a bolder opening, China will never challenge America\u2019s financial dominance and fully realize its superpower ambition,\u201d he said.<\/p>\n

#China #continue #stagnating #incomplete #superpower #match #U.S #financial<\/p>\n","protected":false},"excerpt":{"rendered":"

President Donald Trump\u2019s summit with Chinese counterpart Xi Jinping ended last week without a major…<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[245],"tags":[173,8240,2638,121,5928,1457,12341,12342,722,6368],"_links":{"self":[{"href":"https:\/\/stock999.top\/index.php?rest_route=\/wp\/v2\/posts\/6590"}],"collection":[{"href":"https:\/\/stock999.top\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/stock999.top\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/stock999.top\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/stock999.top\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=6590"}],"version-history":[{"count":0,"href":"https:\/\/stock999.top\/index.php?rest_route=\/wp\/v2\/posts\/6590\/revisions"}],"wp:attachment":[{"href":"https:\/\/stock999.top\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=6590"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/stock999.top\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=6590"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/stock999.top\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=6590"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}