Johannes Petry in Phenomenal World:
Having long prioritized domestic stability over the pursuit of a global role for the Renminbi (RMB), Beijing has recently accelerated its construction of a parallel financial architecture. Without seeking to fully replace the dollar’s global dominance, it has nevertheless sought to reduce its exposure to US monetary power while embedding its trading partners in RMB-denominated circuits of trade and finance.
Whereas British and US financial dominance relied on open capital markets, private banking networks, and the global expansion of highly financialized instruments—from deep derivatives markets to speculative financial activity increasingly detached from the real economy—China’s strategy is state-led and more functional in orientation. RMB internationalization is more closely organized around trade settlement, investment channels, and funding for production and infrastructure. It deliberately avoids the full liberalization and speculative excesses that have inflated the size of the USD-based system far beyond underlying economic activity. Rather than building vast global capital markets, Beijing constructs controlled channels that facilitate cross-border RMB use while maintaining state oversight. This produces a qualitatively different financial empire: smaller in scale compared to the sprawling dollar system, but informed by trade relations, value chains, and political alliances, and structured around managed connectivity.
These infrastructures are not neutral technical fixes. Their design determines who can access liquidity, how transactions are routed, and under which rules financial activity takes place. By embedding itself as a central node in these networks, China is doing more than internationalizing its currency: it is quietly reshaping the architecture of global finance by enhancing Beijing’s financial autonomy, reducing its exposure to US sanctions and monetary policy spillovers, while binding economic partners in the Global South more tightly to Beijing.
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