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China digital currency
OpinionLetters

Letters | China has no world domination plans for the digital yuan. But so what if it did?

  • China is promoting its digital currency to improve convenience for the Chinese public and facilitate trade and investment
  • Why should the US dollar remain the main global reserve currency? Criticism of China is just another example of double standards

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A man sits next to a sculpture of a Chinese coin and abacus in Guangzhou, China, on May 14, 2020. Photo: EPA-EFE
Letters
I am writing in response to the article “China’s yuan internationalisation goal ‘is not to replace US dollar’, top banking official insists” (April 19). In recent years, China has put a lot of effort into promoting its digital currency and internationalising the yuan. This has raised concerns that the renminbi will take over from the dollar as the world’s main reserve currency.
This is a typical example of the double standards when it comes to China. Western countries often politicise China’s every move, and this is especially true of the United States, which sees China, now its greatest competitor, as a threat. Former US president Donald Trump’s repeated politicisation of the Covid-19 pandemic, when it is really a public-health issue, is an example. This controversy over China’s digital currency is another.

Li Bo, the new deputy governor of the People’s Bank of China (PBOC), has clearly said, “Our goal is not to replace the US dollar or any other international currency.” Rather, it is perfectly natural for China to promote the yuan and its digital currency in this digital and globalised era.

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E-wallets such as Alipay or WeChat Pay have already been widely used all over China before the launch of its digital currency. This has earned public confidence and encouraged economic growth. Digital technology is a way to improve convenience for the Chinese public, rather than a scheme to create a world-dominating currency, as some Western countries fear.

And yet, even if China wants the renminbi to become the world’s main currency, what is wrong with that? Why should the dollar remain the top reserve currency? The US may be the world’s strongest economy but it is also known for its government debt. Owning the reserve currency allows the US to get out of trouble by simply printing more money. But whenever it does so, it risks creating inflation in the many other countries with fiscal reserves in US dollars.

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