Breaking Ties: China’s Ambitious Move to Abandon the Dollar

Ganzhou, a Communist Party revolutionary base in southern China, has a rich history.

China Wants To Ditch The Dollar (Photo: Google)

Ganzhou, a non-tourist location, is crucial to the Chinese government’s aim to strengthen the yuan and influence global commodities markets. Ganzhou, the “Rare Earth Kingdom” and “Tungsten Capital of the World,” is more than its revolutionary history, covering more territory than Maryland and having a population as huge as New York City.

Ganzhou is famous in the mineral business since it’s the headquarters of the China Rare Earth Group, a state-owned conglomerate formed in 2021 by three large rare earth firms. Ganzhou supplies over 70% of China’s rare earth minerals, supplying 90% of world demand. The Ganzhou Rare Metal Exchange, founded in 2019, facilitates spot trading of tungsten, rare earth goods, and clean energy transition minerals like cobalt, boosting the city’s prominence.

This strategic action supports China’s goal of increasing the renminbi’s prominence in global commodities pricing to create a non-dollar financial system. China wants to strengthen its financial security and lessen vulnerabilities in the dollar-dominated global economy by expanding commodities markets in industrial towns.

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Chinese authorities say these measures are defensive against dollar liquidity crunches and geopolitical crises, not to dethrone the dollar. Chinese financial regulators worry about vulnerabilities and call for financial system protection amid U.S.-China geopolitical and trade tensions.

Vice chairman of the China Securities Regulatory Commission Fang Xinghai warned of the possibility of being pulled from the U.S. dollar-based global payment system and urged risk mitigation. The narrative emphasizes China’s cautious stance, worst-case scenario thinking, and the need for state-owned companies to protect themselves from international penalties, especially in a Taiwan military war.

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