Towards a New Economic Order: De-Dollarisation, China and the Global South

"In short, all available avenues should be used to promote de-dollarisation in commodity trade among Global South countries."

Today’s piece, by three neo-Marxist development economists, highlights two enduring themes within the PRC: that the global financial system is structured to benefit the United States and its Western allies at the expense of the “Global South”; and that China, together with other developing countries, must unite in constructing a new and more equitable economic order free from American hegemony. The global financial crisis of the late 2000s, Western sanctions against Russia, and Trump’s unpredictable wielding of America’s economic stick have all lent weight to this perspective — and strengthened the argument that China must continue to reorient its economic focus towards the Global South and bolster its financial security, ultimately reducing its dependence on both the US dollar and the Western-dominated SWIFT payment system.

The messages the article seeks to convey are noteworthy; the rigour of its analysis, perhaps less so. As is too often the case in Chinese commentary, the authors attribute most of the world’s ills to the hidden hand of the United States, while overlooking or downplaying the enduring governance challenges and structural economic problems that afflict many countries in the Global South—independently of external influence. They also appear to overstate the degree of South–South solidarity, glossing over the internal divisions and competing interests within rising multilateral institutions such as BRICS+. Moreover, the article largely sidesteps the issue of China’s capital account liberalisation, which continues to hinder its ability to mount a more effective challenge to the West’s financial dominance. It also fails to engage with the complexities and potential resistance that may follow from what arguably forms part of the subtext of this article — China’s ambition to assume economic leadership of the Global South.

Nevertheless, the framing found in pieces like this one is significant, for it both echoes and helps shape the narrative underpinning Beijing’s charm offensive in parts of the developing world — a narrative that has gained particular salience in the wake of Trump’s return. China seeks to cast itself as a responsible, peaceful and dependable power: a champion of free trade, win-win cooperation and “true multilateralism”; a defender of national sovereignty, international rules and climate goals — and the only major power both willing and able to confront American bullying. The new Trump administration, it seems, is making that task markedly easier than it ought to be.

Key Points

1. The global dominance of the U.S. dollar, combined with the ever-expanding fiscal deficits, debt issuance and Quantitative Easing (QE) policies of Western countries, has systematically shifted economic costs onto the Global South.

2. While these fiscal and monetary policies have benefited the Global North—by, for example, boosting domestic demand, maintaining price stability, and supporting capital markets—they have simultaneously placed significant pressure on underdeveloped countries.

3. In particular, for marginalised import-dependent states, the creation and circulation of this excessive liquidity has directly contributed to the persistent inflation of dollar-denominated imports.

4. As long as the dollar maintains its global hegemony, the Global South will remain enmeshed in “development traps” marked by “imported inflation”, domestic economic shocks, capital outflows and persistent macroeconomic instability.

5. These costs are so severe that globalisation—and the stability of the international order itself—are now in question.

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6. Thanks to its strong economic fundamentals and effective capital controls, China has withstood such cost-shifting pressures more effectively than others. Nevertheless, it continues to face intense containment efforts by the West.

7. Following the international sanctions against Russia in 2022, de-dollarisation efforts have accelerated. China, ASEAN and BRICS countries have, among other projects, expanded local currency use to reduce their vulnerability to dollar-centric shocks.

8. China’s push for infrastructure-led South-South cooperation, de-dollarised pricing mechanisms, multilateral monetary “alliances”, and central bank digital currencies (CBDCs) could foster a fairer international monetary system free from the arbitrary dominance of the West.

9. The emergence of a post-hegemonic monetary system could foster a more sustainable and equitable world order, one that no longer holds back the Global South, but actively fosters its peaceful development.

10. Finally, Beijing should develop a “Third Continental Bridge” as a strategic extension of the BRI, integrating economies across Asia and Africa. This corridor would help expand China’s industrial and market space while deepening its ties with the Global South.

HOW SOUTHERN COUNTRIES CAN BREAK THE VICIOUS CYCLE OF [WESTERN] COST-SHIFTING
Yang Shuai (杨帅), Bai Tianyi (白天一) and Wen Tiejun (温铁军)
Beijing Cultural Review (BCR) - December 2024
With special thanks to BCR and Zhou Anan for granting Sinification permission to share this article.
Translated by by Daniel Crain

1. Introduction

At present, core countries [核心国家] are continuously generating financial liquidity, aggravating the endogenous crises of financial capitalism and increasingly shifting cost burdens outward [onto other countries]. Meanwhile, Western nations are expanding their debts irresponsibly, thereby increasing the risk of a [new] world war. As a result, globalisation is undergoing a major crisis of disintegration. [Note: In their use of the term "core countries”, the authors are drawing on the core assumptions of world-systems theory. This theory-specific terminology refers to a global core of advanced capitalist nations who use political, legal, military and economic power to dominate the high end of global supply chains and financial markets, thereby shaping the international system to serve their own interests. Core countries are defined in juxtaposition to semi-peripheral and peripheral countries, which are relegated to lower-skill, low value-added industries and commodity-based markets.]

The US and other Western countries, by virtue of their central position, openly offload costs onto the rest of the world through financial globalisation. This has triggered a tectonic rupture in the formerly stable global currency system and constitutes the principal contradiction among many. Following the outbreak of the Russia–Ukraine conflict in 2022, Western countries froze Russia’s foreign exchange reserves, which in turn eroded confidence in the US dollar and reinforced the objective need for the “de-dollarisation” of international reserves and settlements to mitigate risks.

In this context, the time is ripe to open a “new framework [新格局]” for cooperation among Southern countries. The [most] urgent task is to promote local currency settlement among resource exporters, primary goods producers and manufacturing countries; to push for the [creation and] integration of regional monetary and financial “alliances [联盟]”; and to adopt digital currency technologies to form a diversified global monetary and financial system — thereby building a firewall for Southern countries to protect against “cost-shifting [成本转嫁]” by the US and other Western countries.

2. The Main Contradiction Facing the Development of the Global South: Financial Capital’s Global Cost-Shifting [成本转嫁]

The countries of the Global South have long remained in a state of underdevelopment due to a confluence of historical, political and economic factors. At present, however, the primary cause lies in the malignant expansion of the monetary and financial system dominated by the core countries, which shifts systemic costs onto the rest of the world. This has subjected Southern countries to successive waves of “imported inflation [输入型通胀]” and “imported deflation [输入型通缩]”, rendering their [attempts at] domestic macroeconomic regulation ineffective and leaving them without viable solutions.

2.1 Systemic Causes of the Global South’s Entrapment in the “Low-Level Development Trap [低水平发展陷阱]”

The “development trap [发展陷阱]”, a predicament commonly encountered by Global South countries during their integration into Western-led globalisation, has attracted widespread discussion. [In our view,] the tripartite integration of [Immanuel] Wallerstein’s “world-systems theory [世界体系理论]”, Samir Amin’s “dependency theory [依附理论]”, and our research team’s own “cost shifting theory [成本转嫁论]” together explain the systemic and structural causes that have led Southern countries into “development traps”. This intellectual framework is crucial in understanding the problem of underdevelopment in these countries.

In recent years, through extensive fieldwork and comparative research in Global South countries, we have proposed the principle of “cost-shifting” within the [current] world system. In the modern global order shaped by Western-led globalisation, core countries have continuously offloaded institutional costs outward [onto other countries], thereby reaping systemic gains [获取制度收益]. In this process, the core countries and their interest groups have undergone three stages of historical evolution:

1. The first stage was that of primitive capital accumulation [资本原始积累], characterised by over four centuries of direct external plunder through invasion and colonisation by imperial powers prior to the Second World War.

2. The second stage involved the expansion of industrial capital [产业资本], whereby the early-industrialised nations, following the Second World War, transferred industries to developing countries to exploit cheap labour and resources while offloading costs (e.g. environmental degradation, social tensions [社会矛盾] etc.).

3. The third stage marked the ascendance of financial capital [金融资本]. Beginning in 1971, core countries transitioned towards financial capitalism, issuing vast amounts of currency and exporting liquidity globally—thereby extracting enormous profits while spreading crises. Each of these stages has forced the broad masses of late-developing nations and their domestic lower classes to bear the burden of the externalised costs, plunging them ever deeper into development traps and making escaping these exceedingly difficult.

Especially in the third stage—the contemporary era of globalisation dominated by financial capital—core countries have offshored low-end industries and relied on monetary and financial expansion to extract profits on a global scale. Compared with the second stage’s industrial capital era, the expansion of the monetary-financial system has accelerated significantly, and the speed at which its virtual [虚拟] and speculative costs are shifted onto developing countries has also increased drastically.

This recent memory remains vivid [犹在眼前]: following the subprime mortgage crisis that broke out in the United States in 2007 and its further development into a financial crisis in 2008, the core capitalist countries fell successively into financial or debt crises. The United States led the way, followed by the European Union and Japan, in launching multiple rounds of "Quantitative Easing" (QE).

A massive surplus of liquidity flowed rapidly into global commodity markets, pushing up the prices of energy, raw materials and food worldwide. Developing countries, whose economies are based primarily on the real economy [实体经济], were universally hit by sharp increases in import prices, triggering “imported inflation [输入型通胀]”.

Countries whose agricultural resources were seized by multinational corporations for use in “biomass energy [生物质能源]” or cash crops, as well as those overly dependent on food imports, fell rapidly into “food crises [粮食危机]”. The hungry masses poured into the streets, followed closely by “colour revolutions [颜色革命]” manipulated by external forces.

In this process, the core countries that created excessive liquidity were “successful” in shifting their own inflationary risks onto the Global South. They also leveraged soft power to launch a new Cold War, branding China as a “violator of international norms [国际规则]”, and subsequently initiated a multifaceted offensive encompassing trade, tech and financial wars.

In response to the [global] financial crisis, the core financial-capitalist countries, led by the United States, formed a monetary alliance. As a result, the exclusionary structure of financial capitalism towards the Global South has become increasingly “mature [成熟]”.

On 30 October 2013, the US Federal Reserve, together with five other major central banks from the European Union, the United Kingdom, Canada, Japan and Switzerland, reached a long-term currency swap agreement. The agreement stipulated that if any one party experienced a temporary liquidity shortfall, it could draw upon the liquidity surplus of the other five to resolve the issue.

After a decade of development, the agreement has expanded to include nine financial-capitalist economies. Objectively speaking, these countries have not experienced financial crises and have all seen growth in their capital markets. During the same period, however, marginalised economies have suffered net capital outflows, currency depreciation and the decline of their financial markets.

It can thus be argued that a new financial system is taking shape, one bound together by monetary ties between core countries. The United States is at the centre this system and has enhanced its capacity to safeguard its interests and those of its allies.

Developing countries that rely primarily on the real economy [实体经济] [and] have toiled to accumulate foreign exchange reserves through exports, have found themselves extremely vulnerable when crises strike [不堪一击].

When the Federal Reserve ended quantitative easing in 2013 and restarted its interest rate hike cycle, US dollars flowed back to America, delivering a heavy blow to emerging markets — asset prices fell and local currencies depreciated.

According to available data, between June 2013 and September 2015, exchange rates against the US dollar fell significantly across a number of countries: the Brazilian real depreciated by approximately 73%, the Turkish lira by about 55%, the Indonesian rupiah by around 45%, the South African rand by roughly 34%, the Indian rupee by about 17% and the Chinese renminbi by around 5%. [Note: The original article did not provide direct sources for these figures, but upon comparison with available IMF data, the statistics appear to be largely consistent.]

As a result, most developing countries experienced a slowdown in economic growth or even entered recession, with some states [even] experiencing social unrest and political instability.

2.2 Multiple Layers of Cost-Shifting Amid the Current Complex Contradictions

Within this new world system centred on financial capital, China—by virtue of having the world’s largest real economy and a comprehensive industrial base—possesses inherent “resilience [弹性]” for a soft landing [in times of crisis] and strong market competitiveness. Moreover, China has not yet fully liberalised the convertibility of its currency, which has enabled it to withstand the risk of imported crises arising from cost externalisation by core countries.

However, this very position has made China a strategic target for containment by core countries. In particular, China’s recent initiatives—including promoting the Belt and Road Initiative (BRI), establishing the BRICS Bank [aka New Development Bank (NDB)] and the Asian Infrastructure Investment Bank (AIIB), creating the BRICS Contingent Reserve Arrangement [金砖国家应急基金] and the Silk Road Fund [亚投行], and signing bilateral currency agreements with multiple countries, have objectively sustained China’s competitiveness within the trade and financial systems of the Global South countries. [However, China has] simultaneously been perceived by core countries as a challenge to their dominance over financial globalisation.

Consequently, to maintain the new monetary alliance system centred on dollar hegemony, the United States has sought to rally Western countries into ideological alignment [站队] and has launched a “new Cold War [新冷战]” against China.

At the same time, as the real economy in the United States has been offshored and domestic social tensions [社会矛盾] have worsened, the country now seeks to revitalise its manufacturing base and return to a production-oriented economy. This has led to a renewed “offensive [击性]” ideological struggle against China, reminiscent of the “old Cold War [旧冷战]” era, which was primarily centred on industrial-capital conflict.

Europe is also facing the problems of industrial relocation and hollowing-out [产业空心化]. In this regard, it shares common interests with the United States to engage jointly in industrial suppression and ideologically driven attacks against China.

Since the introduction of the euro in the 1990s, the strategic geopolitical and monetary rivalry [币缘-地缘战略竞争] between the dollar and euro blocs has become the principal “contradiction” [矛盾] of the post–Cold War era.

First, the United States ignited the Balkan conflicts, which led to a surge in fiscal deficits across the eurozone, undermining the foundations for issuing the euro. Then came NATO's eastward expansion, orchestrated by the United States, which triggered regional conflict in Ukraine and disrupted the potential formation of a strategic alliance between Europe and Russia. Later, Washington exploited the rise of the so-called “Islamic State” to stir up turmoil in the Middle East and fanned the flames [拱火] of the Gaza–Israel conflict via its bias towards Israel, thereby disrupting European logistics and overland Eurasian routes. All of these tactics were aimed at undermining Europe’s economic recovery, suppressing the competitiveness of the euro and safeguarding US dominance.

From this perspective, today’s world is confronted not only with a “new Cold War [新冷战]” waged by hegemonic powers against China, but also with remnants of the “old Cold War [旧冷战]” directed at Russia, and a “post–Cold War [后冷战]” rivalry targeting the eurozone. These three layers of conflict intertwine to produce a complex web of contradictions.

Amid this web of contradictions, the methods by which core countries sequentially externalise contradictions onto “semi-peripheral [半核心]” and peripheral [边缘] countries have become increasingly complex and varied. Since the onset of the “new Cold War”, there has been a relentless succession of trade wars [贸易战], technological and information warfare [科技信息战], financial warfare [金融战], media and narrative battles [舆论战], and even biological warfare [生物战]—deploying a combination of hard power [硬实力], soft power [软实力] and smart power [巧实力] in coordinated offensives.

For instance, after launching its trade war against China in 2018, the United States simultaneously escalated this into financial warfare, labelling China a “currency manipulator [汇率操纵国]” and attempting to exploit the 2019 black-clad [黑暴] violence and “chaos in Hong Kong [乱港]” as a window to disrupt the internationalisation of the renminbi. In recent years, it has also manipulated public discourse to exaggerate the risks of Chinese debt, with the aim of shorting China’s bond and stock markets. This indicates that alongside its trade war, the United States has employed a comprehensive set of coordinated strategies. The underlying intent is to suppress China’s rising financial power through exchange rate warfare [汇率战], monetary warfare [货币战], and financial warfare [金融战], thereby preventing China from emerging as a competitor in the global financial sphere.

In the industrial and technological domains, the United States imposed sanctions on Chinese firm ZTE, cut off the supply of chips to Huawei, and in 2023 enacted the explicitly China-focused CHIPS Act—demonstrating its relentless efforts to contain China in critical areas of technology. In sum, the United States is employing every available means to contain China’s rise and deflect its own domestic issues.

In an era where financial capital drives global competition, core countries are accelerating the shifting of costs [onto other countries], leaving peripheral countries of the Global South exposed to increasingly severe external risks. Ultimately, it is natural resources and the ecological environment that are bearing the cost, placing the sustainability of humanity as a whole [全人类整体] under serious threat. Therefore, countries of the Global South urgently need to pursue broader cooperation [with one another].

3. Latin American Countries Explore Resisting the Cost-Shifting of Financial Capital

The United States has long regarded Latin America as its backyard. Latin America's economy and trade are dominated by multinational corporations and its monetary and financial stability is heavily influenced by the US dollar cycle, making it the region most deeply affected by the hegemony of the American dollar.

As such, the struggle against dollar hegemony is most intense in Latin America, making it a region worthy of close and in-depth examination.

3.1 The Latin American Regional Common Currency System “SUCRE”

In 2008, as the Wall Street financial crisis erupted, the Bolivarian Alliance for the Peoples of Our America (ALBA) held its third extraordinary summit and for the first time proposed the creation of a “regional unified system for payment compensation [地区统一支付补偿体系]”—named SUCRE after the acronym of its Spanish title—with “sucre” designated as the monetary unit. This initiative carried clear anti-colonial significance, aimed at resisting the globalisation of financial capital.

In 2009, ALBA member states formally signed the agreement to establish the SUCRE system. This monetary framework consisted of a Regional Monetary Council, a Central Chamber for Payment Compensation, the ALBA Bank and the relevant national central institutions. It also included a reserves and trade integration fund. In 2010, the system issued its first allocation of 152 million sucres, which was distributed among the member countries.

The main goal of ALBA in establishing the SUCRE was to reduce member states’ reliance on the US dollar in both domestic economic operations and foreign trade, to stimulate intra-regional trade, to enable economic complementarity among member states, and to jointly resist the effects of the dollar cycle and international economic shocks on the economies of the region.

In practice, however, due to the low level of industrial development across Latin American countries and the small volume of trade within the ALBA region, the SUCRE system had limited effectiveness in reducing member states’ dependence on the US dollar. For example, Venezuela—the largest provider of services within the system—conducted only 2% of its exports and 2.1% of its imports with other ALBA member states in 2009. Its primary trading partners remained the United States and Europe. By May 2014, the total volume of trade settled under the system amounted to only 1.6 billion Sucres — approximately US$2.2 billion. With the added [issues brought about by] international and regional economic and political factors, the SUCRE system gradually declined in status.

3.2 The Bank of the South

Latin America has been a major epicentre of debt crises. After the outbreak of such crises in this region, Latin American countries were, for a long time, left with no choice but to turn to the World Bank and the International Monetary Fund (IMF) for help. In order to secure loans from these institutions, countries must accept stringent conditions. These conditions, in turn, have exacerbated the structural contradictions hindering development in Latin American countries. For instance, debtor countries receiving loans are often required to implement austerity measures, which can in turn intensify economic recession and trigger social unrest. Additionally, demands for marketisation and liberalisation reforms within debtor countries effectively create favourable conditions for international capital to buy up assets at depressed prices during times of economic vulnerability. Against this backdrop, the “Bank of the South [南方银行]” emerged as a timely initiative [应运而生].

The Bank of the South is a regional financial institution originally proposed and initiated by Venezuela. As a major regional economy and the leading oil producer in Latin America, Venezuela—under the leadership of then-President Hugo Chávez—called as early as 2005 for Latin American countries to pursue financial independence. He urged a break from dependence on traditional international financial institutions such as the World Bank and the IMF, and subsequently gained support from Argentina, Brazil and Ecuador. At the time, with the prices of oil and primary commodities rising in international markets, South American countries enjoyed relatively abundant foreign exchange reserves. Seizing upon this favourable window of time, in 2007, seven countries — Argentina, Brazil, Paraguay, Uruguay, Ecuador, Bolivia and Venezuela — signed an agreement in Buenos Aires, Argentina to establish the Bank of the South.

With initial capital amounting to US$20 billion, the bank aimed to offer loans to Latin American countries. According to the capital funding agreement, Venezuela, Brazil and Argentina each contributed US$4 billion, while the remaining US$8 billion was equally shared among the other four countries. The establishment of the Bank of the South was made possible largely because resource-exporting countries like Venezuela and Brazil had accumulated relatively abundant foreign exchange reserves at the time, owing to rising oil and primary commodity prices driven by the United States’ implementation of quantitative easing (QE) and monetary expansion policies.

However, after 2013, as core countries ended their quantitative easing programmes, global commodity prices plummeted. Oil prices dropped from a peak of US $150 per barrel to just $50. Brazil quickly found itself once again mired in the predicament of high inflation, low growth and rising external debt, ultimately resulting in an abnormal change of government in 2015. Venezuela — under comprehensive US sanctions — was hit even harder. With half of its government revenue coming from oil, the collapse in oil prices severely impacted Venezuela’s public finances, triggering hyperinflation and a dramatic depreciation of the national currency. Under such circumstances, Venezuela and Brazil—the principal contributors to the Bank of the South—were unable to attend to matters beyond their own [difficulties], and as a result, the bank failed to achieve its intended outcomes.

Nevertheless, the Bank of the South remains a commendable effort in seeking to break free from the influence of international financial institutions controlled by Western core countries.

3.3 Digital Currencies: New Explorations

In recent years, with the global rise of digital currencies, Latin American countries have increasingly explored using this new tool to rebuild their monetary sovereignty: Venezuela introduced a petroleum-backed digital currency; Ecuador issued a central bank digital currency in 2015 (though it was abolished in March 2018 due to low public acceptance); and El Salvador directly adopted Bitcoin, becoming the first country in the world to use Bitcoin as legal tender.

New issuance mechanisms and security technologies associated with digital currencies have become a key area of exploration for Latin American countries, where the value of national currencies is generally unstable. However, their practical application within these economies remains very limited.

Despite setbacks in establishing a unified regional currency and financial institution, Latin America’s efforts towards “de-dollarisation” have persisted without interruption. At the end of January 2023, during the 7th Summit of the Community of Latin American and Caribbean States (CELAC), Argentina and Brazil once again proposed a plan to establish a South American common currency zone to counter the influence of the US dollar.

The repeated “de-dollarisation” initiatives in Latin America — a region long plundered by financial colonialism — represent an important component of the Global South’s broader resistance movement against the externalisation of costs by the core countries of financial capitalism.

4. New Developments in the Responses of Southern Countries to the Cost-Shifting of Financial Capital

The setbacks experienced by Latin American countries in resisting US dollar hegemony suggest that weakening the dominance of core countries’ monetary and financial systems requires broader collective efforts by Southern countries. Core countries rely primarily on the “dollar–energy–food [美元-能源-粮食]” triangular support system to shift inflationary pressures onto the rest of the world. More specifically, they take advantage of the global reliance on the US dollar for international settlements, using energy and food commodity trade to absorb excess dollar liquidity, thereby driving up energy and food prices and causing “imported inflation [输入型通胀]” in countries that rely on these imports.

Therefore, promoting direct local currency settlement among countries of the Global South—[particularly] between resource-rich states, primary commodity exporters and manufacturing countries—is an essential means of fundamentally eliminating the impact of cost externalisation imposed by the monetary and financial systems of the core countries.

In recent years, local currency swaps and settlements between developing countries have been advancing steadily. In particular, after the outbreak of the Russia-Ukraine conflict in 2022, Western countries froze Russia’s foreign exchange reserves, prompting Moscow to implement countermeasures by requiring European countries to use rubles to settle gas purchases. This further weakened the credibility of the US dollar and reinforced the objective need for “de-dollarisation” in international reserves and settlements as a means of risk diversification.

The world’s major energy and raw material exporting regions either aspire to or have already begun the process of “de-dollarisation”. In August 2023, ASEAN finance ministers and central bank governors approved the establishment of a local currency trading framework within the region. In February 2023, China and Brazil reached an agreement to use local currencies for bilateral trade. Currently, over 90% of cross-border settlements in China–Russia trade are conducted in local currencies. [So far,] a total of 29 countries have signed bilateral local currency settlement agreements with China.

On 24 October 2024, the BRICS leaders jointly issued the Kazan Declaration [喀山宣言] during their sixteenth summit. The declaration included a decision to expand the use of local currencies in both financing and settlement. Meanwhile, the share of the renminbi in international transactions has continued to rise, reaching over 4.7% in March 2024, making it the fourth most widely used currency in global trade. At the same time, the US dollar's share [of international transactions] has declined to around 41%, while the euro accounts for approximately 35%. Although these currencies still hold dominant positions, the diversification of the global currency supply and settlement methods is an irreversible trend. [Note: The source of these statistics was not listed in the original article. However, they do roughly follow recent findings.]

Compared with a decade ago, the global financial landscape has changed significantly. Countries of the Global South should seize this opportunity to promote the establishment of regional monetary and financial “alliances [联盟]”, thereby contributing to the development of a diversified global monetary and financial system.

5. Future Outlook: Driving the Reform of the [Global] Monetary System through the BRI

At present, China is the world’s largest manufacturing nation, with trade volumes exceeding a dominant share with 70% of the world’s countries [与世界上70%的国家贸易占比超过绝对比重]. It has been the largest trading nation in goods for six consecutive years. Meanwhile, China has amassed substantial foreign exchange reserves through sustained trade surpluses, and the rapid growth of its domestic monetary and financial assets has objectively created momentum for both transitioning toward the financial capital stage and entering global financial competition. The core financial powers inevitably view this as an unacceptable challenge. In the face of the ongoing collapse of globalisation [全球化解体], China must join forces with the Global South, break through the confrontational [diplomacy] shaped by Western monistic thinking [西方一元论思维], and lead South–South cooperation through the path of peaceful development [以和平发展引领南方合作] .

First and foremost, advancing the Belt and Road Initiative (BRI) and opening up the “Third Continental Bridge [第三大陆桥]” is essential to creating new development space for industrial capital. The First Continental Bridge [第一大陆桥] refers to the Trans-Siberian Railway, built by Tsarist Russia to expand its eastern colonies and secure a Pacific outlet—an emblem of the first phase of globalisation. The Second Continental Bridge [第二大陆桥], known as the “Eurasian Land Bridge [欧亚陆桥]”, stretches from Lianyungang in China to Rotterdam in the Netherlands, linking the industrial heartlands of Eastern China and Western Europe during the height of industrial-era globalisation. For years, we have advocated the construction of a “Third Continental Bridge [第三大陆桥]”—a route extending from the Guangdong–Hong Kong–Macao Greater Bay Area through Xinjiang, the Wakhan Corridor, and into Afghanistan and Iran via six-country rail links, continuing into the Arabian Peninsula and ultimately connecting with North Africa. This Asia–Africa land corridor would have its eastern anchor in Hong Kong and its western terminus in Alexandria, Egypt. It could also serve as the foundation for promoting the broader construction of a “Pan-African Continental Bridge [泛非大陆桥]”.

The concept of the “Third Continental Bridge [第三大陆桥]” is mainly aimed at addressing the crisis of industrial capital that has emerged as a consequence of the fragmentation of globalisation. The sustainability and development of China’s industrial capital depend on innovation and technological advancement. This, in turn, requires adequate industrial and market space to support its continued expansion. New technology is a high-investment, high-risk economic sector. If these technologies cannot be absorbed by industry, their costs may become internal triggers for financial crises.

The United States develops new technologies through high capital investment backed by capital market financing. It then incorporates such technologies into its intellectual property regime, using various pretexts to suppress foreign technological innovation in order to maintain high intellectual property fees and offset excessive capital input costs.

In contrast, China must rely on the capacity of high-tech innovation to improve products and productivity within “quality-and-efficiency-driven [质量效益型]” industries. Only by doing so can our country effectively offset and sustain the high costs associated with advanced technologies. Therefore, as the disintegration of globalisation becomes reality, China must prioritise the Global South. By continuing to improve the infrastructure of BRI countries and leveraging the “Third Continental Bridge [第三大陆桥]”, China can form a tiered industrial integration with developing nations in Asia and Africa, thus forging a new framework for peaceful development [和平发展].

Then, to break through [the West’s] financial hegemony, it is necessary to reconstruct a diversified international monetary system that serves the large-scale circulation of “energy–infrastructure–food [能源-基建-粮食]”, thereby replacing the past unipolar system based on the “energy–dollar–food [能源-美元-粮食]” triangle.

For instance, expanding the scale of currency swaps between resource-exporting and manufacturing nations, and deepening local currency settlement in energy and infrastructure transactions, could lead to the formation of a resource pricing system independent of the US dollar.

Additionally, in food trade with lower levels of globalisation, bilateral currency settlement can be promoted. Within [such] regions, comparative advantages can be leveraged to encourage direct barter-style trade—such as the well-known “rice-for-high-speed rail [大米换高铁]” exchange between China and Thailand. Similar practices could eventually facilitate the creation of a rice pricing alliance among Asian countries (where rice is a staple food) that would operate independently of the US dollar.

In short, all available avenues should be used to promote de-dollarisation in commodity trade among Global South countries. This would reduce the “seigniorage [铸币税]” incurred through reliance on the US dollar, as well as mitigate the risks of price volatility caused by fluctuations in dollar liquidity.

Finally, expanding the application of digital currencies within a diversified monetary framework would help establish an international monetary system grounded in digital currency technologies.

For instance, by drawing on blockchain principles, regional settlement systems that operate outside the current dollar-based framework could be treated as units of a “distributed ledger [分布式记账]”, and linked together through the use of “consortium blockchain [联盟链]” [model].

As the proportion of global settlements conducted in US dollars declines, demand for the dollar will gradually diminish, resulting inevitably in significant depreciation or volatility in its value and ultimately the collapse of its pricing system. At that point, a new pricing currency unit composed of a basket of central bank digital currencies (CBDCs) from around the world could be introduced, drawing on the design principles of the Special Drawing Rights (SDR) [of the IMF]. By leveraging blockchain’s tamper-proof technology, such a system could effectively regulate currency issuance by member states and ensure the security and stability of the international monetary system.

Furthermore, trade surplus countries could fund the establishment of new international financial institutions to provide financing channels for trade deficit countries. The surplus countries’ currencies would be exported through international debt mechanisms to deficit countries, aligning creditor rights with their currencies’ purchasing power — thereby reflecting the intrinsic value basis of money, fundamentally overcoming the “Triffin dilemma” and dismantling the hegemonic system of core country monetary expansion that has prevailed since the collapse of the Bretton Woods system in 1971.

A new international financial institution could then be established with funding from trade surplus countries, providing financing channels for trade deficit countries. By exporting their currencies to deficit countries in the form of international debt, surplus countries would align their creditor status with the purchasing power of their currencies, thereby grounding monetary value in real economic fundamentals. This would fundamentally overturn the “Triffin Dilemma” dismantle the core countries' hegemonic system of unchecked currency expansion that has prevailed since the collapse of the Bretton Woods system in 1971.

Name: Yang Shuai (杨帅)
Year of Birth: 1984 (age: 40-41)
Position: Associate Professor, School of Economics, Beijing Institute of Technology
Previously: Lecturer and Postdoctoral Fellow, School of Economics, Renmin University of China (2013-2015)
Research Focus: New institutional economics; development finance; digital economy
Education: BA Jinan University (2003-2007); MA-PhD Renmin University (2007-2013)

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Name: Wen Tiejun (温铁军)
Year of Birth: 1951 (age: 73-74)
Position: Distinguished Professor, Haikou University of Economics
Previously: Dean of the School of Agriculture and Rural Development, Renmin University of China (2004-2013)
Research Focus: Comparative international development; rural development; agricultural economics
Education: BA Renmin University (1983); PhD China Agricultural University (1999)

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Name: Bai Tianyi (白天一)
Position: PhD Candidate, Jinan University
Research Focus: International development

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