On June 9, the first event of the “Advancing a Strong RMB” seminar series, themed “The Global Currency Competition,” was successfully held. The event was hosted by the Global Economic Governance 50 Forum (GEG50) and organized by the PBC School of Finance, Tsinghua University (Tsinghua PBCSF).
Initiated and chaired by Zhu Min, former Deputy Managing Director of the International Monetary Fund (IMF) and former Deputy Governor of the People’s Bank of China, the seminar series aims to explore the opportunities and strategic pathways for advancing RMB internationalization amid profound shifts in the global monetary landscape. The series focuses on key issues including the development of a strong RMB, the restructuring of the international monetary system, and the evolution of financial infrastructure.
Yu Yongding, Member of the Academic Divisions of the Chinese Academy of Social Sciences, provided a comprehensive written statement for the seminar. Keynote speakers included Zhu Min; Peng Wensheng, Chief Economist and Head of Research at China International Capital Corporation (CICC); Shi Kang, Chair Professor at the PBC School of Finance, Tsinghua University; Gao Haihong, Director of the Research Center for International Finance at the Institute of World Economics and Politics, Chinese Academy of Social Sciences; Tang Chao, Associate Research Fellow at the Institute of Finance, Development Research Center of the State Council; Gong Bing, Associate Professor at the University of Chinese Academy of Social Sciences; and Yang Siyao, Postdoctoral Researcher at Tsinghua PBCSF. Experts from GEG50 and alumni representatives of Tsinghua PBCSF also attended the seminar.
Figure: Zhu Min delivering remarks
Zhu Min opened the seminar by introducing the broader macroeconomic background and thematic framework of the series. In his keynote speech, he pointed out that the fundamental driving force behind the evolution of the global monetary system lies in profound changes in the geoeconomic landscape. The current international status of the US dollar far exceeds the relative strength of the US economy, while the status of the RMB needs to be further aligned with China’s economic strength. Looking ahead, China will continue to export both goods and capital to the world, which creates an objective need for the RMB to move toward becoming a stronger currency.
Drawing on the experience of the breakdown of the Bretton Woods system beginning in 1971, Zhu noted that the restructuring of the international monetary system is often accompanied by changes in the fundamentals of the core country. The United States is currently facing high levels of debt and deficits, while fiscal constraints and policy uncertainty are shifting the dollar’s anchor toward increasingly fragile financial markets, thereby weakening the credit foundation of the currency. Against this backdrop, official reserves around the world are becoming more diversified, with rising shares of gold and non-traditional reserve currencies, reflecting substantive market constraints on the dollar’s privilege. He emphasized that geoeconomic restructuring and the move toward a more multi-polar monetary system are now the main trends, providing an important historic opportunity for the RMB to steadily enhance its international role and develop into a strong currency.
Figure: Peng Wensheng
Peng Wensheng noted that the recent strength of the US dollar has relied not only on the network effects of its traditional reserve currency status, but also on capital expenditure driven by the wave of artificial intelligence technologies. The new technology cycle has pushed up real demand and interest rates in the United States, providing substantive support for a strong dollar and US safe assets. At the same time, he warned that as deglobalization and financial sanctions intensify, the universal usability of financial assets is declining. Countries may return, to varying degrees, to capital account controls, and the old model of using financial markets to adjust the balance of payments is gradually becoming less effective.
Peng argued that monetary multi-polarity corresponds to global economic fragmentation, which in turn increases the importance of real assets. This represents a core advantage for China as a major manufacturing and trading power. He suggested that RMB internationalization need not be overly fixated on full capital account liberalization. Instead, China can draw on the experience of the early Bretton Woods system by relying on solid trade and investment fundamentals, while combining them with bilateral intergovernmental currency cooperation, in order to explore a prudent pathway forward under conditions of incomplete convertibility.
Figure: Shi Kang delivering remarks
Shi Kang argued that, as China enters the initial stage of the 15th Five-Year Plan period, it is highly timely to discuss the development of a strong RMB. He described this issue as a key breakthrough point in major-power competition. Against the backdrop of intensifying competition between China and the United States in technology and manufacturing, China’s most urgent shortcoming lies in the monetary and financial fields.
Shi analyzed that the RMB has entered a new round of appreciation, supported by strong economic fundamentals and trade surpluses. Meanwhile, the creditworthiness of the US dollar has been shaken by high debt, high inflation, and industrial hollowing-out. The world urgently needs stable RMB-denominated assets to help maintain financial stability, and the window of opportunity for building a strong RMB has already opened. He suggested that China should seize this opportunity to borrow externally, both to provide high-quality RMB assets to the world and to help replace local government debt, boost capital markets and household consumption, and create room for high-quality economic development. Shi emphasized that the conditions for a strong RMB are now in place and that this process will support the steady and sustainable development of the Chinese economy.
Figure: Gao Haihong delivering remarks
Gao Haihong pointed out that the current “post-Bretton Woods system” is in fact a “non-system system,” characterized by a center-periphery structure with the US dollar at its core. She emphasized that the world is now in a turbulent period of monetary system transition. Although the dollar’s status is being challenged, no real substitute has yet emerged. The dollar’s network externalities remain exceptionally strong, as demonstrated by countries’ continued reliance on the dollar in recent geopolitical conflicts.
Gao noted that while the euro has the potential to challenge the dollar, its development is constrained by the absence of safe assets such as a unified eurobond. She particularly warned that financial stability is crucial during the transition period and that the world must guard against the “Kindleberger Trap.” At present, the global financial system remains highly dependent on liquidity support from the Federal Reserve, and maintaining stability requires more providers of public goods. China, with its open stance, currency swap mechanisms, and participation in international institutions, is well positioned to play a key role in financial stability. A strong RMB, she argued, will become an important stabilizing anchor during the transition of the international monetary system.
Tang Chao analyzed changes in the international status of the euro, its structural constraints, and the prospects for China-Europe monetary cooperation. He noted that although the euro remains the world’s second-largest international currency, some of its key indicators have declined, and its influence is still mainly concentrated within Europe. Many scholars, including Barry Eichengreen, regard the euro as closer to a “regional dominant currency.” The development of the euro is constrained by multiple structural factors, including the lack of a unified fiscal framework, declining economic and trade competitiveness, fragmented capital markets, and insufficient supply of safe assets.
In recent years, the European Union has sought to enhance the international role of the euro, but the effectiveness of these efforts will depend on fiscal and financial integration, improved economic competitiveness, and the development of strategic autonomy. Tang noted that rising geoeconomic risks are reshaping the international monetary landscape. China and Europe together account for more than one-third of the global economy; their economic and trade cooperation continues to deepen, and two-way investment continues to expand. There remains substantial room for deepening financial linkages and expanding monetary cooperation between the two sides.
Gong Bing explained the long-standing gap between the international status of the US dollar and the relative strength of the US economy from the perspective of the evolution of international monetary power structures. Drawing on an analytical framework developed by her research team, she offered a definition of dollar hegemony. Although the United States’ shares of global GDP and trade have declined, while its fiscal deficit, current account deficit, and debt burden have continued to rise, the dollar retains systemic advantages in the core functions of an international currency, including reserves, payments, and financing.
Since World War II, Gong argued, the anchor of dollar hegemony has evolved through three stages. It is currently supported primarily by market demand, with national credit serving as the underlying foundation. Today, geopolitical and economic bloc formation, the rise of competing currencies, and the weakening of US macroeconomic stability and political credibility are eroding the pillars that sustain market demand for the dollar. She emphasized that while dollar hegemony still possesses network resilience in the short term, structural cracks have already emerged. Strengthening RMB financial markets, improving the linkage between onshore and offshore markets, increasing financial product innovation, and expanding cross-border payment and clearing channels can help enhance the RMB’s international status while further weakening market demand for the dollar.
Yang Siyao argued that although the dollar’s shares in the core areas of international currency use remain relatively stable, the economic fundamentals, credit environment, and safe-asset anchoring mechanism that support the dollar have all weakened significantly. The contradiction between global demand for safe assets and US fiscal sustainability continues to accumulate, making a “Triffin Dilemma 2.0” increasingly likely.
At the same time, as the dollar weakens, the euro is shifting from “neutral defense” to “active expansion,” while the RMB is demonstrating latecomer advantages through “real-economy support” and “technological empowerment.” Digital currencies have opened up an entirely new arena of competition, giving rise to three competing models: the United States extending its hegemony through stablecoins, the European Union building a “regulatory moat,” and China using the digital RMB to reshape the monetary system. Yang noted that the international monetary system has entered a new era of diversified currency competition. The transition from a unipolar to a multipolar monetary system reflects the rebalancing of global power, but it also brings challenges such as lagging governance, increased exchange rate volatility, and rising systemic risks. The international community urgently needs to advance comprehensive reform of global financial governance, build a multi-layered financial safety net, and establish standards for digital financial interoperability in order to ensure the stable operation of the global financial order.
Figure: Tang Chao, Gong Bing, and Yang Siyao (from left to right) delivering remarks
During the discussion session, participants engaged in in-depth exchanges on topics including institutional deficiencies in the euro area and the development of a eurobond market, transaction costs under a multipolar currency system, the safe-asset attributes of RMB assets, competition in digital currencies and payment ecosystems, the Special Drawing Rights mechanism, and currency basket arrangements. Participants noted that RMB internationalization requires not only the improvement of infrastructure such as payment and clearing systems and digital currency arrangements, but also the enhancement of the liquidity, safety, and investability of RMB-denominated assets, so as to expand the RMB’s development space amid competition within a diversified currency ecosystem.
In his concluding remarks, Zhu Min stated that the core theme of the seminar was how to achieve a breakthrough. Geoeconomic changes have already pushed the global monetary system into a stage of diversified currency competition. The road toward a strong RMB must follow internal economic logic and market forces, while also being deeply embedded in the complex evolution of the international monetary system. He expressed his expectation for further insightful discussions in the subsequent sessions of the “Advancing a Strong RMB” seminar series.
Figure: The seminar in session
The seminar was hosted by the Global Economic Governance 50 Forum and organized by Tsinghua PBCSF.
