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Tag: China-US

  • US-China Military and Economic Rivalry: An In-Depth Analysis on Developments That Could Upset the US in an Era of Redefined Hegemony

    US-China Military and Economic Rivalry: An In-Depth Analysis on Developments That Could Upset the US in an Era of Redefined Hegemony

    With recent developments, we observe how the People’s Republic of China, through advancements in digital currency technologies and military capabilities, is increasingly threatening the global hegemonic position of the United States. The internationalization of the digital RMB as a potential rival to the SWIFT system enhances China’s economic independence, while its hypersonic missile systems, cyber warfare capacity, and geopolitical assertiveness are undermining Washington’s defense strategies. Moreover, the erosion of the US dollar’s reserve currency status could severely impact the sustainability of American military bases, maritime dominance, and its global diplomatic network. These multidimensional challenges must be analyzed through strategic, technological, and economic lenses to understand their long-term implications.

    1. A New Race for Hegemony

    The post-Cold War unipolar world order led by the US is now facing a systemic transformation. Since the 2008 global financial crisis, China has emerged not only as an economic alternative but also as a technological and military superpower by proposing a new model of governance (Allison, 2017). This transformation is increasingly defined not just by traditional metrics of power, but also by the global competition over digital infrastructure and monetary systems.

    1. The Digital RMB and the Birth of a New Financial Architecture

    China’s central bank-developed e-CNY (digital yuan) functions not merely as a domestic payment tool but as the core of a cross-border economic network, integrated with the Beidou navigation system and envisioned as an alternative to SWIFT (BIS, 2024). This system offers an exit route from financial isolation for countries under Western sanctions. The initiation of trade using the digital RMB by nations such as Malaysia, the United Arab Emirates, and Saudi Arabia signals a dramatic decline in the US dollar’s use as a reserve currency (Subacchi, 2020).

    2.1 Technological Advantages Over SWIFT

    While transactions via SWIFT typically take 2–5 days, the digital RMB reduces this time to just 7 seconds. The elimination of intermediaries results in up to 98% savings in transaction costs. This shift is not only technical but represents a strategic transformation.

    2.2 Integration of the Digital RMB with the Belt and Road Initiative

    Infrastructure projects under the Belt and Road Initiative (BRI) are directly aiding the spread of the digital RMB. China has begun integrating the digital yuan as a payment method in countries that receive BRI investments in ports, railways, and energy infrastructure. Thus, the spread of the RMB is both financial and geographical.

    1. China’s Military Technological Leap: A New Deterrence Doctrine

    China’s advancements, particularly in hypersonic missile technologies, have begun to erode the US’s traditional military superiority. Of the 19 war simulations conducted by the Pentagon in 2024 and 2025, the US reportedly failed to achieve dominance in 17 scenarios against China (Fox News, 2025).

    3.1 Implementation of the A2/AD Strategy and Hypersonic Missile Capabilities

    Through its Anti-Access/Area Denial (A2/AD) strategy, China has significantly restricted the maneuverability of the US Navy in the South China Sea and Taiwan Strait. China’s DF-17 hypersonic systems can strike targets over 2,000 km away in just 20 minutes (Krepinevich, 2021). If deployed against US aircraft carriers, this technology could fundamentally disrupt maritime superiority in the Pacific.

    3.2 Quantum Communication and Cybersecurity Investments

    China is fortifying its military communication infrastructure with quantum encryption, aiming for immunity against cyberattacks. Additionally, by integrating AI-supported combat simulations into decision-making systems, the Chinese military is beginning to surpass the US in data-driven warfare strategies.

    1. The Erosion of the US Dollar’s Reserve Currency Status

    One of the pillars of US economic power—the dollar’s reserve currency role—is under threat from China’s digital payment networks and trade corridors. The breakdown of the “petrodollar” system could make it impossible for the US to sustain its $800 billion annual current account deficit (Eichengreen, 2011).

    4.1 Initial Oil Trades with Thailand and the UAE

    Thailand’s first digital RMB-based oil purchase in 2024 marked a critical point in the breakdown of the petrodollar system. The same year, energy deals between the UAE and China also used digital RMB. If this trend continues, the dollar’s dominance in energy trade will face a severe blow.

    4.2 Shift in Global Reserve Allocations

    According to IMF data, while 59% of central bank reserves were held in dollars in 2022, this ratio declined to 47% by 2025. Meanwhile, the share of digital RMB in global reserve portfolios rose from 2% to 11% during the same period (IMF WP, 2023).

    1. Geostrategic Consequences: Erosion of Bases, Naval Power, and Diplomatic Network

    5.1 Financial Sustainability of Military Bases

    The US operates nearly 750 military bases worldwide (Vine, 2021), many of which rely on dollar-based financing mechanisms. The decline of the dollar’s reserve status could make it financially unfeasible to maintain these bases, leading to a significant reduction in US influence in Europe, the Middle East, and the Far East.

    5.2 Weakening of Naval Dominance

    Through investments in ports along the Digital Silk Road and Arctic routes, China has made significant strides in controlling maritime trade routes. This could constrain US “Freedom of Navigation” operations in the Pacific and Indian Oceans.

    5.3 Erosion of Diplomatic Power

    As the dollar weakens, so does US influence over multilateral institutions such as the IMF and World Bank. China’s rise through the Asian Infrastructure Investment Bank (AIIB) and its digital platform-based diplomatic initiatives could lead to the unraveling of the Western-centric international order.

    1. China’s Strategic Timing: A Power Filling the Void

    China has strategically capitalized on the void created by US domestic political divisions, debt ceiling crises, and technological inertia. By aggressively developing its digital currency infrastructure between 2021–2025, China has built not just a technological alternative, but a structural system of its own.

    1. Conclusion: A Silent Financial Coup and the New World Order

    The battle for hegemony rooted in digital infrastructure is being won not with tanks, but with code. China’s digital RMB, Beidou satellite system, quantum communication, and AI-enhanced military capabilities constitute an alternative order to traditional US hegemony. The erosion of the dollar signifies not only a decline in American economic power but also its military and diplomatic strength. In this context, China’s strategy constitutes a “silent financial coup.”

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    References:
    • Allison, G. (2017). Destined for War: Can America and China Escape Thucydides’s Trap? Houghton Mifflin Harcourt.
    • Bank for International Settlements. (2024). CBDCs in Emerging Economies: Design Principles and Cross-border Use.
    • Eichengreen, B. (2011). Exorbitant Privilege: The Rise and Fall of the Dollar and the Future of the International Monetary System. Oxford University Press.
    • Fox News. (2025). US losing wargames against China in Taiwan scenarios, Pentagon sources say.
    • IMF. (2023). Currency Composition of Official Foreign Exchange Reserves (COFER).
    • Krepinevich, A. (2021). The Eroding Balance of Terror: The Decline of American Military Deterrence and What Can Be Done About It. Center for a New American Security.
    • Subacchi, P. (2020). The People’s Money: How China Is Building a Global Currency. Columbia University Press.
    • Vine, D. (2021). The United States of War: A Global History of America’s Endless Conflicts, from Columbus to the Islamic State. University of California Press.
    • Zhang, M., & Yang, X. (2024). Digital Yuan and Geopolitical Finance: A New Order in the Making. Journal of International Political Economy, 31(2), 145–167.
    • Zhou, X. (2009). Reform the International Monetary System. People’s Bank of China Discussion Paper.

    Sefa M. Yürükel, Social Anthropologist and Ethnographer , MA (Master of Arts), 1997, University of Aarhus, Denmark

  • Chinese president concludes state visit to US

    Chinese president concludes state visit to US

    Chinese President Hu Jintao left Chicago for home on Friday after concluding a four-day state visit to the United States, during which Hu and his US counterpart Barack Obama agreed to build a China-US cooperative partnership based on mutual respect and mutual benefit.

    “It is also conducive to world peace and development,” Hu said.

    In his speech, Hu elaborated on the domestic and foreign policies of the Chinese government and on how to advance China-US relations in the new era.

    “Working together hand in hand, we will build and develop a China-US cooperative partnership based on mutual respect and mutual benefit and deliver greater benefits to the people of our two countries and the world over,” he said.

    The Chinese president flew to Chicago on Thursday afternoon to continue his visit to the United States.

    On Friday, Hu, accompanied by local officials, visited Walter Payton College Preparatory High School in downtown Chicago.

    The high school houses the Confucius Institute in Chicago (CIC), which primarily focuses on the Chinese language and cultural education programs and is the only such institute targeting primary and middle school students in the United States.

    Later in the day, Hu visited an exhibition of companies operating in the US Midwest. Most companies at the exhibition in Chicago’s suburban city of Woodridge are Chinese-funded ones.

    During his tour of the exhibition, Hu encouraged Chinese companies operating in the US to play a bigger role in promoting economic and trade cooperation between the two countries.

    The success of Chinese companies in the United States is a specific example of the China-US mutually beneficial cooperation, he said.

    The operation of these companies not only yields profits for themselves, but adds momentum to economic development in the US Midwest, he added.

    At least 40 Chinese businesses now have operations in the Chicago area, and the number is growing. For example, Wanxiang America Corp., which makes solar panels, has opened plants and a headquarters around Chicago in the last two years.

    Before leaving the US for home, Hu sent a message of thanks to US President Obama, expressing his belief that through the efforts of the two sides, China-US relations would be further developed to better benefit the peoples of the two countries and make a greater contribution to world peace, stability and prosperity.

    The Chinese president began his state visit on Tuesday in Washington. The visit, Hu’s second as head of state, is aimed at enhancing the positive, cooperative and comprehensive relationship between the two countries.

    Hu last visited the United States in April 2006.

    President Hu, who began his visit on Tuesday, had extensive and in-depth discussions with Obama at the White House on Wednesday on major bilateral, regional and world issues.

    The Global Times