RENMINBI-CENTRIC GLOBAL FINANCIAL SYSTEM: CHINA'S STATECRAFT AND MULTI-POLARITY

Chinese state-craft has empowered a potential reformation of the existing global international economic and legal architectures. This article evaluates the potential new monetary order through the lens of the U.S.-China hegemonic rivalry instead of a more conventional authoritarian versus free world paradigm. China aims to create a renminbi-centric zone encouraging the use of renminbi as a reserve currency and a unit of settlement for trade. Chinese initiatives may serve both as a framework and an incentive to raise the demand for renminbi. Significantly, despite intense U.S. pressure, numerous U.S. allies are incentivised to align with China's objectives and integrate financially with Chinese financial institutions in the longer term. Moreover, the plan to introduce a central bank digital renminbi could potentially serve to promote renminbi internationalisation. China's prospects of becoming a hegemon and the dedollarisation of the global financial order would herald a transformatory shift in the overall geopolitical order.