China’s Xi Ramps Up Push For Yuan To Rival Dollar As Global Trade Currency

Last Updated:February 01, 2026, 22:40 IST

Xi Jinping urges building a strong yuan to boost its global use and challenge US dollar dominance, with China expanding CIPS, currency swaps, and BRICS cooperation.

Xi Jinping urges building a strong yuan to boost its global use and challenge US dollar dominance, with China expanding CIPS, currency swaps, and BRICS cooperation.

Chinese President Xi Jinping has called for building a “strong currency" to expand the global use of the yuan and elevate it to the status of an international reserve currency, a move widely seen as an effort to challenge the dominance of the US dollar.

China, the world’s second-largest economy after the United States, has been accelerating the international use of the yuan to reduce dependence on the dollar. Last year, nearly one-third of China’s USD 6.2 trillion foreign trade was settled in local currency.

In an article published on Saturday in Qiushi, the Communist Party’s leading theoretical journal, Xi said China must build a “strong currency" that can be widely used in international trade, investment and foreign exchange markets, and eventually achieve global reserve status.

Although Xi did not explicitly mention the US dollar, he has consistently pushed for the yuan, also known as the renminbi (RMB), to emerge as a global currency rival since assuming power in 2012.

Xi noted that while China ranks among the world’s largest economies in terms of banking assets, foreign exchange reserves and capital market size, it remains “big but not strong" overall. Building China into a financial powerhouse, he said, would be a long-term task, according to the Hong Kong-based South China Morning Post.

China, along with Russia, has been promoting the Cross-Border Interbank Payment System (CIPS) as an alternative to the SWIFT international banking network. Beijing has also expanded the use of the yuan in bilateral trade with Russia, particularly in energy transactions, as China is Russia’s largest buyer of oil and gas.

According to reports, China has signed currency swap agreements with about 50 countries to facilitate trade in local currencies.

Over the past year, the yuan has generally strengthened against the dollar, though international investment banks say it remains undervalued. Analysts at Goldman Sachs said in a January 5 report that the yuan could be trading about 25 per cent below its long-term fair value against the dollar.

Observers say the Chinese central bank prefers a relatively firm currency but remains cautious about allowing rapid appreciation.

Beijing and Moscow have also been pushing within BRICS now a 10-member grouping to explore a common BRICS currency and an alternative BRICS Pay payment system to rival SWIFT. The issue is expected to feature at this year’s BRICS summit to be hosted by India.

US President Donald Trump has warned of imposing heavy tariffs if BRICS countries move ahead with plans to challenge the dollar’s dominance.

Xi said China’s financial development model, described as “financial development with Chinese characteristics", differs from Western models and is tailored to China’s national conditions. A financially strong country, he said, must rest on a solid economic foundation, strong scientific and technological capabilities, robust financial institutions, effective regulation, international financial centres and a high-calibre pool of financial talent.

Calling for sustained efforts, Xi said China must continue raising its financial standards to support its broader national development goals.

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