Is US-China Trade War Starting to Erode US Dollar Dominance?



Karen Yeung | South China Morning Post

The contemplation by Asian finance leaders to add the Chinese and Japanese currencies to a regional foreign reserves buffer fund is the latest sign that the trade war is causing countries to slowly move away from dependence on the US dollar.

Their consideration, analysts said, could be underpinned by expectations of the shift in world consumption patterns and corporate investments away from globalisation and towards a system centred on the three large regions – the US, the European Union and China – that operate differently.

The 10 members of the Association of Southeast Asian Nations plus China, Japan, Korea, together known as “Asean+3”, were reported earlier this month to be considering including the yuan and the yen to their Chiang Mai Initiative Multilateralization (CMIM) scheme, a framework for multicurrency swap arrangements.

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