BRICS Countries Told to Consider Countering the Dollar’s Global Hegemony – Economics Bitcoin News

Chinese experts have asked leaders of the BRICS (Brazil Russia India China South Africa and South Africa) nations to look into countering dollar’s global hegemony. Still, the experts concede that any attempt to diminish the dollar’s dominance will take time.

BRICS Countries’ Dependence on the US-Dominated Global Financial System

Chinese experts have urged BRICS countries, namely Brazil, Russia, India, China and South Africa, to counter the dollar’s global dominance which is now being abused by the United States government, a report has said. Experts believe that BRICS nations can do this by strengthening trade ties, and limiting their dependence on a system where the U.S. dollars dominates.

Global Times reported that experts called just as the five country’s foreign ministers scheduled for a virtual meeting May 19. Foreign ministers are expected to meet and discuss ways of strengthening solidarity, consensus building, and giving the emerging market a larger voice in global governance.

In making the case against BRICS countries’ continued dependence on the U.S.-dominated financial system, one of the experts, Cao Yuanzheng, the chairman of BOC International Research, claimed the United States only prioritizes its domestic needs and is less concerned about the potential consequences of its policies. Yuanzheng stated:

The international transactions and financial markets, which are dominated by the US dollar, have shown growing internal contradictions as Washington’s policies treat its domestic needs as the first goal instead of international needs.

US Dollar Neutrality

The expert added that the recent sanctioning of Russia, as well as the United States government’s freezing of the former’s forex and gold reserves, means the U.S. dollar is no longer a neutral currency. Meanwhile, the report implied China’s yuan currency, which is popular in countries and regions along routes of the Belt and Road Initiative, can be an alternative to the dollar. According to the report, an agreement among BRICS nations could lead to the increase in the use of the yuan within certain areas.

However, other experts interviewed by Global Times warned that reducing the U.S. dollar’s dominance will take time. Similar sentiments were recently expressed by the former governor of China’s central bank, Zhou Xiaochuan. Xiaochuan has previously warned that reducing the dollar’s dominance will also depend on whether businesses and the public are willing to suddenly abandon a currency they have been using for a long time.

Tian Yun, the former vice director of the Beijing Economic Operation Association, suggested the yuan’s chances of taking the U.S. dollar’s position as the main settlement currency depend on other countries’ confidence in China’s progress.

Still, another expert, Zhou Maohua, a macroeconomic analyst at Everbright Bank, spoke of the Chinese currency’s rising role in global payments, settlements, and foreign exchange reserves over the long term.

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Terence Zimwara

Terence Zimwara, a Zimbabwean journalist, writer and author who has been awarded the Zimbabwe Booker Prize. His writings have covered the economic problems of several African countries and how digital currency can offer an escape route.