China’s President Xi Jinping pushes yuan as global reserve currency

Chinese President Xi Jinping has made one of his clearest public pitches yet for building a “strong currency” to elevate the yuan to the status of a global reserve currency , a move widely seen as sharpening China’s long-term challenge to the dominance of the US dollar .

In an article published in Qiushi , the ruling Communist Party’s top theoretical journal, Xi said China must develop a currency that can be widely used in international trade, investment and foreign exchange markets and eventually achieve global reserve status . While he did not directly name the US dollar, the remarks mark an unusually explicit articulation of an ambition he has largely pursued through policy rather than rhetoric since taking power in 2012 .

China, the world’s second-largest economy , has accelerated efforts to increase the use of the yuan in cross-border transactions to reduce dependence on the dollar . Last year, nearly one-third of its USD 6.2 trillion foreign trade was settled in local currency, according to official data.

Xi said China remained “big but not strong” in finance despite its vast banking assets, foreign exchange reserves and capital markets , stressing that building a financial powerhouse would be a long-term task. The goal, he wrote, is to create a system with a strong currency, a strong central bank, resilient financial institutions, effective regulation and high-quality financial talent .

China and Russia have promoted the Cross-Border Interbank Payment System (CIPS) as an alternative to the SWIFT banking network , while expanding yuan use in bilateral trade, particularly in energy transactions. Beijing has also signed currency swap agreements with around 50 countries to facilitate trade in local currencies.

Over the past year, the yuan has generally strengthened against the dollar , though international investment banks say it remains undervalued . Analysts at Goldman Sachs recently estimated the currency could be trading about 25 per cent below its long-term fair value, even as Chinese authorities seek to prevent sharp appreciation.

Beijing and Moscow have also pushed within the expanded 10-nation BRICS bloc for a common BRICS currency and a BRICS Pay system to rival SWIFT. The issue is expected to feature at this year’s BRICS summit in India .

The United States has warned against moves to undermine the dollar’s global role. US President Donald Trump has said Washington could impose heavy tariffs if BRICS countries proceed with plans to challenge dollar dominance .

Xi said China’s financial development path would follow modern global principles while retaining “Chinese characteristics” distinct from Western models. A financially strong nation, he wrote, must rest on solid economic, technological and national strength, supported by core financial pillars such as a strong currency, strong institutions and rigorous supervision.

The comments are being viewed by observers as Xi’s most direct statement so far on China’s ambition to turn the yuan into a true international reserve currency .