Macro-Finance Salon (No. 128) and Book Launch of De-dollarization: The revolt against the dollar and the rise of a new financial world order

On September 16th, the Macro Finance Salon (No.128) and the launch of the new book De-dollarization: The revolt against the dollar and the rise of a new financial world order, sponsored by the IMI and the Department of Money and Finance in the School of Finance, co-sponsored by the Renmin Center For China's Foreign Strategy Study, was held in Conference Room 209 of Mingde International Building. Gal Luft and Anne Korin, co-director of the IAGS, delivered keynote speeches. Subsequently, Ding Yifan, vice chairman of China Society of World Economics, former executive deputy director of World Development Institute, Development Research Center of the State Council and Tu Yonghong, deputy director of IMI and professor of the School of Finance at Renmin University, and Xu Qinhua, professor of the School of International Studies and Vice Dean of National Academy of Development and Strategy (NADS), made comments on the keynote speeches. Zhang Lirong, Chinese envoy to the European Union, and Zhong Zhengsheng, chairman and chief economist of the CEBM, and managing director of Caixin Insight, attended the meeting and participated in the seminar. The meeting was chaired by Di Dongsheng, associate dean of School of International Studies of Renmin University. Dr. Luft said there was a quiet rebellion against American financial hegemony, but they did not believe that the Renminbi or any other currency would replace the dollar. In their study, they found that the dollar's share in the global currency basket and international trade has declined, which is conducive to the development of other currency portfolios. Therefore, the hegemony of the United States over the global economy will be weakened, and consequently its ability to maintain the huge fiscal deficit of the United States will be weakened. They predict that trade wars will evolve into currency wars, while demand for the dollar will shrink as demand for alternative currencies, gold and digital currencies increases. Commodity trading, especially oil, will become increasingly non-dollarized. "BRI" and "BRICS+" will be the main platforms for de-dollarization. The US government will continue to raise its national debt and will not be able to maintain interest rates for a longer time. Inflation will continue to expand and is likely to lead to stagflation. The world monetary system tends to be multipolar. In order to face possible crises, Ms. Korin offered their suggestions. She stressed that the most effective solution is to acknowledge the existence of the crisis and actively face it, rather than to be blindly optimistic and complacent with the status quo. She proposed reassessing U.S. financial enforcement measures and coordinating law enforcement with national and economic security. She proposed conducting serious and frank talks with the top US banks on the future loan demand and model of the United States and identifying the financial situation to sort out the fiscal deficit. She also suggested we should stay ahead in which we have already taken the lead in, and in some slightly backward fields, we should acknowledge our deficiencies and make up for them. After the keynote speech, the guests commented. Prof. Ding Yifan, Prof. Tu Yonghong, and Prof. Xu Qinhua respectively put forward their own opinions and doubts on the reasons for the de-dollarization, the change of the international status of the RMB under the trend of de-dollarization, and the role of oil in the process of de-dollarization. Ms. Korin added that the United States has long recognized the risks of its own economic structure, but this understanding is not comprehensive. Some people have difficulty in understanding the actions of the Trump administration. Actually what he has done is to accelerate the disclosure of the United States’ own issues. At the end of the discussion, Dr. Luft emphasized the importance of technology. He believed that China has already taken the lead in moving to a cashless society.

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