Optik plays a role in geopoliticsAnd when the President of the Brics Alliance drive is missing from an important summit in Brazil, it speaks volumes.
When China announced that Premier Li Qiang would participate in the Rio Brics top meeting instead of Xi Jinping, speculation exploded. I have read opinions that claim that there has been an internal coup, that the move signals China’s confidence in its ability to drive Brics behind the scenes, or that China is facing domestic issues more difficult than it releases.
Given China’s opaque nature, it is unlikely that we get a straight answer at any time soon. Instead, let’s look at what the move can mean in view of China’s long -term goals, Digital Yuanand de-dollarization.
The silent treatment–Does Xi Brics send a message?
When it comes to China, what is not said as important as what is. Macroinvestor Ray Dalio characterized the Chinese government’s behavior as a “strict parent”, and said:
“As a top-down country … they behave like a strict parent, and they go through it. It’s their approach, we have our attitude.” – Ray
China has been clear about its goals: multipolarity and a global re -balancing of power, decreasing and financial sovereignty, reform of Global governanceEnsure energy supply and access to strategic resources and promote Chinese technical and infrastructure standards.
Given the lack of meaningful progress against de-dollarization within the block and the Jitteriness of the members as US counts China’s move And questions ultimatum, Xi’s absence in Rio can be interpreted as silent dissatisfaction.
Of course, China has to go the diplomatic tight like everyone else. It cannot afford to release Brics or promote its members, which would only harm its long -term goals. However, it can signal frustration and subtle print members to proceed with the agenda.
De-dollarization and BRICS currency–What is the goal?
At the last annual Brics Top meeting in Kazan, Russian President Vladimir Putin called one BRICS -Currency “premature.” But that does not mean that it is outside the table, and that does not mean that the alliance will drop and continue to use USD indefinitely.
At the Kazan Summit, Member States agreed to use national currencies in internal trade. This would mean that BRICS phases out USD and western Payment systemLike Swift, in trade within the block. In essence, this would reduce USD from meaningful use in countries worth an estimated 40% of global gross domestic product (GDP) in purchasing power parity (PPP), and nations containing over half of the world’s population would slowly cease using USD as a reserve currency.
The effects on USD and interest rates on US debt would be measurable. I have previously written about how there is No realistic alternative To USD in the short term, but China plays the long game. Undermining US dominance In the global south it may take decades, but as the old saying says, A journey of a thousand miles begins with a single step.
All pieces are already in place; China’s digital yuan is liveIts Belt and Road Initiative (BRI) may have been scaled back, but it still has agreements with 150 countries, and loans from BRICS New Development Bank are increasingly seen as favorable for conditions offered by the International Monetary Fund (IMF) and World Bank.
Put together all this becomes the picture clear: China sees itself as the future leader of the Asia-Stilla Sea region at a minimum, and its currency, payment rails, banks and institutions are important tools for achieving that goal.
Uncle Sam is not happy and he makes it clear
Geopolitics is a cut throne, and of course, when the current king feels a threat, he replies.
Since the days when America could rely on unmatched power, Hollywood propaganda and global willingness to commit Democracy and freedom Is long gone, the United States has increasingly gone to open print tactics. The re -election of Donald Trump made it clear that the status quo is over, and Uncle Sam intends to negotiate every business, including trade agreements with allies, and it does not care to use a heavy hand to promote their interests.
Under Trump’s clock, sanctions, CustomsAnd conversations are on one day and outside the next. The one that is seen as friendly with China is a potential target for US IRE. The 47th president has made it clear that all attempts to move from the dollar standard will never be allowed. During the Rio Top meeting he announced Additional 10% customs on BRICS-adapted nations.
Of course, this has slowed down China’s progress towards its goals. There has been no serious movement towards AV-dollarization or the absorption of the digital yuan. India has signed business with the United States and the United Kingdom and resumed talks with the European Union and Israel. In the meantime, China’s economy shows some signs of stress.
With all this, it is a little surprise that China is dissatisfied with its colleagues Brics, and therefore it should not be surprising that XI has sent a silent message with its absence at the Rio summit.
In the big Global Power game, not all ultimatums need to be spoken. Sometimes the most powerful messages are delivered in silence.
Look at | From BRICS to blockchain: How global trade and digital currencies develop
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