China will remain an ‘incomplete superpower’ until it can catch up with U.S. financial might, market veteran says
China is striving to enhance its global financial standing but remains significantly behind the U.S. in financial competition. Despite its industrial and military advancements, China's yuan accounts for only a small fraction of global reserves and trade invoices. Experts suggest that without loosening capital controls, China will struggle to achieve its superpower ambitions in finance.
- ▪China's yuan claims just 2% of central bank assets globally, despite the Chinese economy accounting for 17% of global GDP.
- ▪The U.S. dollar dominates with about 58% of global reserves and 54% of trade invoices.
- ▪China's financial system is tightly sealed, with foreign investors owning less than 5% of its stocks and bonds.
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President Donald Trump’s summit with Chinese counterpart Xi Jinping ended last week without a major breakthrough, but still achieved Beijing’s goal of putting itself on equal footing with the U.S.Recommended Video Meanwhile, China’s industrial might continues to drive export dominance, its AI is nearly on par with the top models, and its military is increasingly advanced. With the U.S. bogged down in Iran, alliances fracturing, and debt soaring, the narrative on America has pointed in the opposite direction, namely a superpower in decline. “But in at least one field — financial competition — the opposite is true. China is stagnating, allowing America to dominate by default,” Ruchir Sharma, chair of Rockefeller International, pointed out in a Financial Times op-ed.
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