Name: China Just Did The UNTHINKABLE... It's REALLY Bad For US Dollar
Uploaded: 2025-11-12T18:03:13.000Z
Duration: 11 min 5 s
Description: Thousands of YouTube videos with English-Chinese subtitles! Now you can learn to understand native speakers, expand your vocabulary, and improve your pronunciation...

Adverbs of degree

The dollar just lost 10% of its value just in the first half of 2025.

More and more countries are rejecting the dollar and moving towards the Chinese Yuan.

Adverbs of manner

Almost all trade between China and Russia in 2025 is going to be outside the United States financial system, primarily in Chinese Yuan.

There is a growing number of nations that want an alternative financial system and the only country that can provide that is is China.

Saudi Arabia has been considering to use the Chinese Yuan instead of the dollar for its sell of its oil.

Russia, India, China, Thailand, Argentina, Iraq have been all either buying or selling their energy in Chinese Yuan.

There is even such a thing that is called petro Yuan.

And this shift has been accelerating recently.

China for the last 30 years primarily relied on the US dollar to grow its economy.

Thirty years ago, China was at the top of the poorest countries in the world.

Today, China is one of the wealthiest countries in the world and the world's second largest economy.

But it has been relying on the dollar because the dollar is efficient, stable and profitable.

Whether it's China or any other nation, they they can take these dollars and invest them in the United States.

The US Bond market is stable and provides you with steady returns.

And in the world of finance, it's considered as a safe haven.

You want some extra returns, you can invest it in the US stock market.

The US stock market historically has been growing by about 10%.

And you can easily convert your dollars into your local currencies.

And that's what the United States has been attracting so much capital, especially since the currency became the global reserve currency.

But recently China has been making a push to push its currency to become more oftenly used in global trade.

Before 2022, the share of yuan in China's global trade has been below 2%.

But since then that number has been accelerating every single year.

That is also clear in China's cross border payment system.

The volume in Chinese yuan has also been drastically increasing in the last five years, as if China is trying dethrone the dollar as the global reserve currency.

Well, maybe not as the global reserve currency, but

at least as the currency that you can use in international trade.

And here is how China is speeding up that.

Interest rates in China are 3%, which are lower than the United States interest rates at 4%.

Since China is having an opposite problem.

China is facing a deflation where prices are falling down that allows China to offer loans at a low interest rates than the United States.

So other nations that want to build massive infrastructure projects and cannot possibly afford them.

They are borrowing money from Chinese banks in Chinese Yuan.

And that's a perfect way to pursue people to use the Chinese Yuan.

Because now these countries are locked into these debts for decades to come.

And they have to pay those debts in Chinese Yuan plus interest.

That increases the amount of Chinese Yuan in global trade.

That's how the United States locked other nations back in 2010s and early 2000s.

If you want to borrow money, you primarily would do that in US Dollar because your loan would come from either the World bank or International Monetary Fund.

Even if you borrowed from other nations, those nations would demand you to pay them back in US Dollars.

Because the US Dollar was the most stable currency in the world and everybody trusted that the dollar is going to hold its value.

But with this strategy, China is pursuing other nations to use the Chinese Yuan much more often.

But if you look at the big picture, China is still far away from the United States.

The US Dollar is primarily used in all global transactions and China's share is very small, even though that it has been rising from 7% to 8.5% in the last three years.

China is smaller countries that don't have the world's second largest economy, such as the Japanese yen or the British pound.

In fact, the Chinese economy is larger than the Japanese and the British economy combined.

The real question is that why this time is different.

Forty years ago, China was one of the poorest countries in the world.

And it primarily focused on building the foundation of its economy and becoming a very stable and solid economy.

First of all, it became the world's global factory.

And today China dominate some of the key industries in the world, from clean energy to AI.

Yes, it's still behind the United States, but

even the CEO of Nvidia recently said that China is going to win the AI race.

But in 2015, when it realized that its economy is strong enough, it started building an alternative financial system to the United States.

So it built its own cross border transaction payment system that could rival slyft.

Chinese banks started offering loans outside China.

China at the national level started pushing yuan to be used in international trade.

It also started massively selling its US treasuries and would take that money and buy gold.

The United States sanctions Russia and isolates Russia from the global financial system.

Russia was deeply integrated into the global financial system and suddenly its economy was hurt really strongly.

And they're like, we don't want to be at the mercy of the United States.

What if we disagree in foreign policy with the United States?

Will the United States treat us the exact same way?

So other nations literally willingly started using the Chinese yuan because China was the only country that could provide that alternative system to the rest of the world, simply because it was geographically and demographically big enough to have that kind of economy that could rival the United States.

And that's when the use of the Chinese yuan and international trade suddenly exploded.

But there is something serious that is stopping the Chinese yuan.

There are strict capital controls in China.

Moving currency outside China is extremely difficult.

You can't just convert your Chinese yuan into US Dollars.

There is a limit on how much you can do that, and that pushes away investors.

Imagine if you have made a lot of money in China and now you have to take that money and move it outside China.

Converting it into the US Dollars or currency is extremely difficult because there are regulations put in place to prevent that.

China wants to have full control over its domestic monetary system and it wants to have full control over the Chinese Yuan.

a currency is the primary commodity in the hands of the government to control the prices.

So if you want your exports, for example, to be much more price competitive compared to the rest of the world, then you want to devalue your currency.

But the only way you can do do that is when you have full control over your currency.

Unlike the United States that has a completely free market.

You can take US Dollars and you can convert them into any currency you want.

You want to convert hundreds of billions of dollars?

Nobody is going to stop you because the US Market is so huge and so competitive and so stable that nobody is worried that selling US Dollars is going to hurt the US Dollar in general.

The Chinese government even made crypto illegal.

So you can actually be selling or buying crypto inside China.

Because through crypto, you can take money outside China.

You can convert your Chinese yuan into crypto and then just move crypto outside China.

If China is not planning to have a completely free market, you can have the global reserve currency.

If you don't have a completely free market, just like the United States, if you want to control your currency, private investors will never trust you.

China wants to create a multipolar international monetary system.

They want to create a system that rivals the United States and does not replaces the United States.

Becoming a global reserve currency is way more difficult than most people imagine.

It's not just as easy as having the world's largest economy.

If your world's largest economy is controlled by the government, it is not going to attract capital, it is not going to attract investors.

The moment you lift all of these restrictions, all of that capital is going to flow out of that country, and