China Review News (CRN) recently republished an article by Professor Zhao Xiao from the Beijing University of Science and Technology. The article stated that the total amount of international settlements done with the Chinese currency in 2011 was RMB 2.08 trillion (around US$306 billion). At the same time, the U.S. unemployment rate was above 8.5% and 15% of the U.S. population received government help. Professor Zhao believes that China’s currency is preparing to challenge the dominance of the U.S. dollar and the United States is playing defense. Zhao pointed out three major challenges China has to overcome: (1) maintaining the stable growth of both the domestic economy and China’s exports; (2) gaining enough national acceptance by promoting fairness, justice, and democracy; (3) establishing an international alliance against the current currency leader – the United States – by enhancing China’s soft power, or even its “hard” power.
Source: China Review News, February 13, 2012