The Chinese Yuan is now emerging as a strong currency competitor, as the US dollar notes a falling trajectory due to Trump’s recent tariff policies. The dollar’s fall has led its alternative to gain supreme market momentum, with the Chinese Yuan raking in significant attention out of all global currency competitors. Here’s a new hypothesis stating how the Chinese Yuan can be the next reserve asset smoothly and spontaneously.
Also Read: Market Bets on Yuan as De-Dollarization Picks Up Pace
Three Reasons Why the Chinese Yuan Could Be the Next Reserve Asset
1. Reduced Sensitivity to Global Chaos
In the latest review of Hong Kong International Finance, two authors have come up with a statement documenting the yuan’s susceptibility to global chaos and mayhem. These two authors concluded that Yuan has shown reduced sensitivity to certain risk indicators, such as global stress, or during the times of the Russia-Ukraine war. The yuan has also been noticing an influx of capital running towards it, as it continues to adapt to a new role as one of the dependable “safe haven assets.”
2. Resilience Towards Trump’s Tariffs
While the US dollar has lost global confidence, with its global forex reserves dropping to 57.7%, the Chinese yuan has risen to the occasion, attracting major price momentum towards itself.
In addition to this, the Chinese Yuan has shown resilience towards Trump’s tariffs, emerging as a haven asset for investors at a time of acute global stress.
10 Reasons China's Yuan Has Gone Global
— S.L. Kanthan (@Kanthan2030) August 2, 2023
🔹Yuan/Renminbi is one of Fab Five that make up IMF's basket of currencies ("SDR")
🔹More global trade invoicing being done in #yuan than in Euro!
🔹In China's cross-border transactions, yuan has surpassed US dollar!
🔹#Petroyuan is a… pic.twitter.com/uhSOh7ka1p
3. Offshore Yuan Market Continues to Rise
One of the key traits that have been touting the yuan as a safe-haven asset is its offshore usage and momentum. Per Sputnik, a notable finance expert, Yuan’s offshore markets have strengthened, which is helping in Yuan’s mainstream expansion and growth.
“WIDE CIRCULATION IS KEY. 💬 “There is a very large offshore yuan market,” John Gong, a Beijing-based professor of economics, tells Sputnik. 💬 “It is actually starting to be used more increasingly as a country’ reserve currency. YUAN’S STABILITY. 💬 “What makes the yuan attractive is its stability,” says Francesco Sisci, a China expert. You know what the policies and the exchange rate of the yuan are, while the US dollar has been volatile.”
🪙 YUAN'S STABILITY
💬 "What makes the yuan attractive, is it's stability," says Francesco Sisci, a China expert.
You know what the policies and the exchange rate of the yuan are, while the US dollar has been volatile.
3/8 pic.twitter.com/heGBqxTnIj— Sputnik (@SputnikInt) July 11, 2025
Also Read: Curb On De-Dollarization As Chinese Investors Expect Yuan Dip