China’s yuan is 10 years from ending US dollar hegemony, says economist Jeffrey Sachs
- Jeffrey Sachs predicts a multicurrency world in the future, with the yuan and other currencies a decade away from an even keel with the US dollar
- Yuan lags well behind other international currencies in use and convertibility, with analysts sceptical of whether Sachs’ comments are viable
China’s yuan could be on an equal footing with the US dollar as a mainstream currency in as little as a decade, earlier than most people think, according to Columbia University professor Jeffrey Sachs.
“I believe that we will move from a largely dollar-based settlements system to a multicurrency settlements system, in which the dollar, euro, and [yuan] are all used for international settlements,” said the noted American macroeconomist.
I believe that we will move from a largely dollar-based settlements system to a multicurrency settlements system, in which the dollar, euro, and [yuan] are all used for international settlements
Sachs was a former special adviser to the UN Secretary-General, and his prescriptions have been used to guide a number of economically-troubled countries back to health. Over the past 30 years, he has advised dozens of heads of state and governments on economic strategy across the world and was the main architect of Poland's debt reduction operation around the end of the cold war.
Sachs has been predicting the US dollar’s demise for some years, but his comments grew stronger following the election of US President Donald Trump in 2016, whose policies he has said will see the currency “displaced”.
The main reason to expect a de-dollarisation in the monetary order stemmed from America’s declining share of the global economy, Sachs said. The US now accounts for 15 per cent of the world economy, down from around 21.6 per cent in 1980, according to estimates from the International Monetary Fund.
