The Chinese currency remains far from supplanting the U.S. dollar in global trade, but its increasing usage abroad is helping its allies and friends get around U.S.-led economic measures.
A clerk counts renminbi banknotes at a branch of Bank of China in Nantong, Jiangsu province, July 23, 2018. Credit: Imaginechina via AP Images
The opening of the Rooppur nuclear power plant in eastern Bangladesh next year will provide the largest boost to the country's energy production capabilities in decades. But it will carry another distinction relevant to international finance — it will have been paid for, in large part, with renminbi, even though China has barely been involved in its construction.
Using China’s currency has helped solve a long stalemate between the government in Dhaka and Russia, which initially agreed to finance the $12.7 billion project in 2016. Following Russia’s invasion of Ukraine last year, the U.S. effectively shut it off from the dollar-dominated global financial system, making it nearly impossible for Bangladesh to make loan-related payments in greenbacks; Bangladeshi officials, meanwhile, refused to settle the transaction in Russian rubles.
The Rooppur nuclear power plant currently under construction in Rooppur, Bangladesh, June 29, 2022. Credit: Energy & Power
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Robert Lighthizer, the U.S. Trade Representative under Donald Trump, reflects on his decision to launch the trade war with China and begin the process of "strategic decoupling" — a process he says the U.S. must see through to the end.
