In a revealing interview on the Think BRICS show, Chinese economist Jian Lian—a leading voice on BRICS and Global South cooperation—provided unprecedented insights into China’s strategic approach to currency internationalization and the broader de-dollarization movement reshaping global finance. His analysis cuts through the noise of speculation to reveal the real mechanisms, internal tensions, and practical […]
Menej ako 1 min. min.
In a revealing interview on the Think BRICS show, Chinese economist Jian Lian—a leading voice on BRICS and Global South cooperation—provided unprecedented insights into China’s strategic approach to currency internationalization and the broader de-dollarization movement reshaping global finance. His analysis cuts through the noise of speculation to reveal the real mechanisms, internal tensions, and practical pathways that will define the future of international monetary systems.
When China issued a $2 billion bond in Saudi Arabia in November 2024—just before Trump’s return to the White House—the move sparked intense speculation about hidden strategic intentions. The bond was oversubscribed nearly 20 times and priced just 1-3 basis points above US Treasury bonds, a remarkable achievement in the heart of the petrodollar system.
But according to Lian, the reality is more nuanced than the dramatic interpretations circulating among analysts. While some observers saw this as a masterstroke in “using the dollar against itself,” Lian emphasizes that China is not a monolithic entity. Different factions within the Chinese government hold varying perspectives on currency strategy.
The official explanation from China’s Ministry of Finance and People’s Bank of China (PBOC) focuses on practical objectives: leveraging dollar liquidity overseas and completing the Chinese benchmark interest rate curve. However, Lian hints at deeper divisions within Beijing’s bureaucracy—between confident national leadership and more conservative financial officials who remain skeptical of aggressive de-dollarization moves.
This internal tension reveals a crucial reality: China’s de-dollarization strategy isn’t a coordinated master plan executed from a single command center. Instead, it reflects competing interests between visionary leadership and risk-averse financial institutions.
President Xi Jinping’s confidence in the yuan’s future is unshakeable, according to Lian. But his reasoning differs fundamentally from Western assumptions about reserve currencies. Xi views the yuan as “the most strong productivity-backed currency in the world today”—far more solid than today’s US dollar, which Lian characterizes as “very largely fictitious” and primarily serving speculation in stock markets and crypto assets.
This distinction is critical. The yuan’s strength, in Lian’s analysis, derives from tangible economic capacity: China produces over 15% of global industrial products (and 100% of some categories), can facilitate commodity purchases from Russia and Brazil, and increasingly enables oil purchases from Middle Eastern producers. This is currency backed by real productive capacity, not financial engineering.
The contrast with the dollar couldn’t be starker. While the US dollar floats on a sea of financial speculation and geopolitical power, the yuan is anchored to actual goods, services, and infrastructure. This represents a fundamentally different model of what a reserve currency should be—one based on production rather than hegemony.
One of Lian’s most provocative arguments challenges the Western orthodoxy that reserve currencies require open capital accounts. He traces this assumption to the neoliberal revolution of the 1980s, when financial liberalization became dogma. But this requirement is historically recent and, he argues, fundamentally misguided.
Before the 1980s, even developed nations like Japan maintained strict capital controls while operating sophisticated financial systems. The architects of the Bretton Woods system—Harry White and John Maynard Keynes—would find today’s assumptions about capital liberalization “ridiculous,” according to Lian. They operated in an era of capital controls and understood that true international currency strength comes from serving real economic purposes, not from financial market accessibility.
China’s approach reflects this historical wisdom. The internationalization of the yuan should serve the “real economy”—goods trade, services, infrastructure loans, and industrial cooperation—not financial speculation. This is fundamentally different from the dollar’s role as a vehicle for global capital flows and financial arbitrage.
The real issue isn’t capital controls; it’s preventing the weaponization of currency systems. As Lian notes, the goal is to create “convenience of trade” while eliminating “unnecessary inconvenience or even threats from the weaponization of the old hegemonic currency.”
Perhaps the most revealing aspect of Lian’s analysis is his candid discussion of resistance within China’s own financial establishment. While Xi Jinping and top national leadership embrace yuan internationalization, PBOC officials and major state-owned banks often drag their feet, constrained by what Lian describes as a lack of confidence in China itself.
The example of Russian trade illustrates this tension perfectly. When US Treasury Secretary Janet Yellen visited China in early 2024 to warn against facilitating Russian payments, major Chinese banks—despite their stated commitment to de-dollarization—largely complied with American pressure. Smaller banks that had been active in Russian trade were forced to stop. The PBOC and major institutions like ICBC, Bank of China, and China Construction Bank prioritized avoiding US sanctions over supporting BRICS partners.
This reveals a critical vulnerability in China’s de-dollarization strategy: the financial bureaucracy’s fear of American retaliation often outweighs strategic considerations. These officials, Lian suggests, are “very unconfident about the nation itself”—a generational gap between older, more cautious bankers and younger, more confident policymakers aligned with Xi’s vision.
Yet despite these internal obstacles, practical examples demonstrate that yuan internationalization works. Kenya’s decision to convert its China-financed railway debt from US dollars to Chinese yuan provides a compelling case study. After President William Ruto’s state visit to China, Kenya’s financial ministry proposed the conversion, which was approved within a month.
The benefits were immediate and tangible: lower interest rates (Chinese rates are significantly lower than dollar rates), reduced foreign exchange pressure, and the ability to continue infrastructure development without dollar constraints. Kenya entered what Lian calls “the Chinese period” rather than suffering under dollar scarcity.
This model is entirely workable and replicable across the Global South. Yet it remains underutilized because PBOC officials and policy banks haven’t fully embraced it as a strategic priority. The win-win solution that benefits both China and developing countries isn’t being systematically promoted by China’s financial institutions.
When the conversation turns to proposals for a BRICS currency—whether modeled on the SDR (Special Drawing Rights) or a new basket currency—Lian becomes skeptical. He identifies a fundamental problem: artificially created international settlement units face inherent disadvantages against established currencies.
The core issue is interest rates. While Chinese interest rates hover below 2%, Brazilian real rates exceed 10%, Russian rates remain above 10%, and South African rand rates are similarly elevated. Why would any rational economic actor choose a basket currency with a blended rate of 8-10% when they could use Chinese yuan at 2%?
This isn’t a technical problem that clever design can solve. It’s an economic reality rooted in different countries’ monetary conditions. The SDR itself has become “a forgotten vehicle” precisely because it offers no compelling advantage over existing currencies. A BRICS currency would face identical challenges.
The real bottleneck isn’t the concept of alternative currencies; it’s the institutional dysfunction within BRICS itself. The New Development Bank (NDB), the only functioning daily institution within BRICS, operates under a consensus mechanism that renders it nearly paralyzed. As Lian bluntly states, this makes the mechanism “almost unworkable.”
India, he notes, frequently blocks initiatives within BRICS, using the consensus requirement to protect its own interests or speculate between BRICS and American alignment. This is why, despite raising significant capital in Chinese yuan, the NDB hasn’t deployed these resources strategically. It remains trapped in bureaucratic gridlock.
Lian’s solution is pragmatic: create secondary institutions that operate under execution orders rather than consensus. The European Union’s experience demonstrates that requiring unanimous agreement among diverse members paralyzes decision-making. BRICS needs a similar structural reform.
His specific proposal: establish a subsidiary entity to issue a BRICS version of the SDR as an experimental mechanism. If it works after two or three years, expand it. If not, let it fade like the original SDR. This allows innovation without requiring consensus on every detail.
One of the most insightful sections of the interview addresses credit rating agencies—the “hearts of American financial hegemony.” Moody’s, S&P, and Fitch wield enormous power through their ability to shape narratives about countries and companies, often with limited on-the-ground knowledge.
These agencies face a fundamental conflict of interest: they’re paid by the entities they rate, yet they maintain the pretense of independence. In developing countries, they can publicly downgrade ratings without consequences. In the US, they face regulatory pressure. This asymmetry reflects raw financial power.
Lian proposes a technological solution: leverage AI and cooperation among Chinese, Russian, Brazilian, and Indonesian credit agencies to create a mutual reference web. Using advanced language models and data analysis, these agencies could provide faster, cheaper analysis than Western competitors while incorporating policy considerations that Western agencies ignore.
Crucially, this alternative system would recognize that some entities need support during downturns, not punishment. China’s success in industrial development comes partly from counter-cyclical policy—supporting struggling sectors rather than abandoning them. A BRICS credit system could embed this wisdom into its methodology.
Perhaps Lian’s most important insight concerns how China actually finances Global South development—and why this model should be replicated through BRICS institutions.
The mechanism is elegant: Chinese policy banks or the NDB issue bonds denominated in yuan, purchased by other Chinese banks. This is monetarily equivalent to creating new currency. That newly created yuan then flows to African countries (Tanzania, Ethiopia, Uganda) to purchase Chinese engineering services and construction. Chinese companies hire local workers, transfer technology and management skills, and modernize infrastructure.
This isn’t moving existing money from China to Africa. It’s creating new money specifically for development purposes—a mechanism rooted in modern monetary theory that loan creation generates deposits and money supply.
This model has already transformed China’s western provinces, creating the world’s highest bridges and most advanced infrastructure. Applied systematically across Africa and the Global South, it could replicate this development trajectory while generating employment, technology transfer, and sustainable growth.
The beauty of this approach is that it doesn’t require consensus on a BRICS currency or complex new institutions. It simply requires using existing mechanisms—loans, bonds, currency swaps—strategically and systematically.
Lian concludes with an observation about timing: the pace of de-dollarization will depend on geopolitical confrontation. The more intense the US-China rivalry, the faster China will reduce its dollar holdings and accelerate yuan internationalization. Conversely, periods of reduced tension might slow the process.
This suggests that de-dollarization isn’t primarily a financial strategy but a geopolitical necessity. As long as the US maintains the ability to weaponize its currency system—freezing assets, imposing sanctions, threatening financial exclusion—countries have rational incentives to reduce their dependence on dollars.
The Ukraine war provided a crucial lesson: financial assets held in foreign currencies can be frozen or wiped out overnight. This reality has crystallized thinking among Chinese leadership and is gradually shifting the calculations of other Global South nations.
What emerges from Lian’s analysis is a picture of de-dollarization that’s far more pragmatic and less revolutionary than either enthusiastic supporters or alarmed critics suggest. It’s not a coordinated master plan but a gradual shift driven by rational economic incentives and geopolitical necessity.
The obstacles are real: internal resistance from risk-averse financial bureaucrats, institutional dysfunction within BRICS, and the sheer inertia of dollar dominance. But the direction is clear and irreversible. As more countries like Kenya demonstrate the benefits of yuan-denominated finance, as Chinese productivity continues to expand, and as the US continues to weaponize its financial system, the transition will accelerate.
The future of international finance won’t be a sudden collapse of dollar hegemony or a triumphant rise of a BRICS currency. Instead, it will be a gradual, messy, pragmatic shift toward a multipolar monetary system where the yuan, ruble, real, rupee, and rand play increasingly important roles alongside a declining but still significant dollar.
For policymakers, investors, and observers of global finance, understanding this nuanced reality—rather than either utopian or apocalyptic narratives—is essential for navigating the monetary transformation already underway.
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About the Guest: This analysis is based on an interview with Jian Lian, a Chinese economist and founder of HengCe Economic Research, a think tank focused on BRICS and Global South strategies. Lian has participated in key economic forums across China and BRICS nations and advises partner countries on reducing dependence on Western monetary systems. His work can be found at HengCe Economic Research, with additional content available on YouTube featuring his presentations at international economic conferences.
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