China RMB Challenges US Dollar Hegemony
The RMB is ready to challenge US dollar hegemony in international finance, but there's one major obstacle standing in its way.
According to a recent analysis from China Academy, China needs to understand how the dollar exercises its power and what underpins it. This requires studying the financial theories promoted by mainstream Western media and academia, which often contain utopian thinking that doesn't reflect reality.
The key to understanding dollar hegemony lies in recognizing that there is no truly risk-free asset anywhere in the world. China's large holdings of US Treasuries, worth over $618 billion as of July 2026, carry real risks. If the US were to wage a financial war against China, it could use domestic law to freeze these securities, rendering them worthless.
This is not just a hypothetical scenario. Western countries have already frozen billions in Russian gold and foreign-exchange reserves after the Russia-Ukraine conflict in 2022.