China already is a part of IMF special drawing rights, there's not really anything major they gain over the course of at least a 20 year time frame from trying to displace the US as the reserve currency. All it would do is make their exports far more expensive and that would absolutely destroy their economic growth.
SDRs are only slightly more of a currency than the Bancor.
What matters is real use of alternatives to the USD, so the USD no longer has the freedom to just print money in a weird form of modern seigniorage, and so the USD can’t effectively enforce sanctions via control of the global financial system.
This is baby steps, but it is a step forward. If it comes close to messing with China’s internal currency needs, it can always switch global trade on the eYuan track.
If you're a part of SDR it's far easier to get away with endlessly printing money without fear of hyper inflation, it's not about SDRs being tradable. China does the same thing re money printer that the US does, if anything they use it more aggressively. Even if China competes more aggressively with the dollar as a reserve currency, the US will retain it's ability to print money aggressively when needed just as any of the countries with SDR status can, usually it's a coordinated effort across central banks.
The strength the US has to enforce sanctions isnt directly tied to reserve currency status as much as military status and being the worlds largest consumer market, although the reserve currency status does mostly help pay for all this enforcement.
And the big point is that an export oriented country is negatively impacted by being the global reserve currency. China has such a large population that I don't really see a world where they benefit from their exports being more expensive in favor of engaging in imperialist mass ownership of foreign assets.
China already is a part of IMF special drawing rights, there's not really anything major they gain over the course of at least a 20 year time frame from trying to displace the US as the reserve currency. All it would do is make their exports far more expensive and that would absolutely destroy their economic growth.
SDRs are only slightly more of a currency than the Bancor.
What matters is real use of alternatives to the USD, so the USD no longer has the freedom to just print money in a weird form of modern seigniorage, and so the USD can’t effectively enforce sanctions via control of the global financial system.
This is baby steps, but it is a step forward. If it comes close to messing with China’s internal currency needs, it can always switch global trade on the eYuan track.
If you're a part of SDR it's far easier to get away with endlessly printing money without fear of hyper inflation, it's not about SDRs being tradable. China does the same thing re money printer that the US does, if anything they use it more aggressively. Even if China competes more aggressively with the dollar as a reserve currency, the US will retain it's ability to print money aggressively when needed just as any of the countries with SDR status can, usually it's a coordinated effort across central banks.
The strength the US has to enforce sanctions isnt directly tied to reserve currency status as much as military status and being the worlds largest consumer market, although the reserve currency status does mostly help pay for all this enforcement.
And the big point is that an export oriented country is negatively impacted by being the global reserve currency. China has such a large population that I don't really see a world where they benefit from their exports being more expensive in favor of engaging in imperialist mass ownership of foreign assets.