Opinion
The CPC’s financial vision under Xi: The ascent of China and the yuan
The global financial system has reached a critical threshold where the post-Cold War order, established around the hegemony of the U.S. dollar, is no longer accepted without question. While the dollar remains the world’s preeminent currency, its supremacy is no longer as absolute or uncontested as it once was. Geopolitical tensions, trade wars, the normalization of sanction-based policies, and the increasing prudence of central banks are compelling sovereign states to adopt new positions through national currencies. At the heart of this transformation lies China. Beijing’s ambition to reshape the global order is manifested not only through its manufacturing prowess, trade volume, or technological breakthroughs but, increasingly, through the power of its currency.
This ambition is by no means coincidental. The Communist Party of China (CPC) and its leader, Xi Jinping, have long regarded financial development as a fundamental pillar of national strength and sovereignty. Comprehensive assessments published in Qiushi, the CPC’s flagship theoretical journal, explicitly reveal that China’s objective transcends mere economic growth; the strategy to become a “financial superpower” has now been elevated to a matter of state policy. In Xi Jinping’s paradigm, finance is not a neutral mechanism left to the vagaries of the market. Rather, it is an instrument of power—one guided under Party leadership to serve the real economy and prioritize national interests.
The Financial Development Path with Chinese Characteristics
It is at this juncture that the “financial development path with Chinese characteristics” diverges from Western models. While the West’s financial philosophy is predicated on individual profit, capital liberalization, and market autonomy, the Chinese model views finance as an extension of social stability, development, and state capacity. The emphasis on Party leadership, risk management, cautious progression, and rule-based innovation—all underscored by Xi Jinping—demonstrates that China has deliberately situated its financial system within an ideological framework. This approach is the product of a “state intellect” that does not view financial crises as inevitable fate, but rather defines them as manageable risks.
The most visible and critical pillar of this strategy is the yuan. In Xi’s rhetoric, the yuan is treated as the primary symbol of China’s global role. The Chinese leader has set a clear objective: for the yuan to become a robust currency widely utilized in international trade, investments, and foreign exchange markets, and firmly embedded within the reserves of central banks. This constitutes a direct challenge to the dollar-centric global financial order.
The Rise of the Yuan: A Symbol of China’s Global Power
Current figures indicate that this objective is no longer merely a theoretical vision; it is finding a tangible resonance on the ground. According to data released by the People’s Bank of China in the first half of 2025, cross-border yuan usage reached 35 trillion yuan, recording a 14% increase on an annual basis. This surge is directly linked to the fact that infrastructure loans provided under the Belt and Road Initiative (BRI) are increasingly denominated in yuan. In the projects it finances, China is not merely exporting capital; it is circulating its currency, thereby expanding its global sphere of utility.
The global landscape points toward a similar shift. Over the last decade, the U.S. dollar’s share of global foreign exchange transactions has receded from approximately 60% to the 40% range, signaling the dawn of a new era where dollar dominance is no longer absolute. This shift is even more pronounced in China’s own foreign trade. While the U.S. dollar’s share in China’s external trade transactions stood at 80% in 2010, by 2023, yuan usage surpassed 50%, overtaking the dollar for the first time. Furthermore, according to SWIFT data, the yuan’s share in global currency transfers has reached 4%. This is not merely a technical adjustment; it is a potent indicator that China is consolidating its economic sovereignty within the monetary realm.
The yuan’s most striking progress is evident in the fields of trade and financial transactions. Its share in global payment systems is rising rapidly, securing its place among the world’s top five most-traded currencies in foreign exchange markets. Data from the People’s Bank of China shows that cross-border yuan transactions are growing at double-digit rates annually. The Belt and Road Initiative, the BRICS New Development Bank, the Asian Infrastructure Investment Bank (AIIB), the use of local currencies in energy trade, bilateral trade agreements, and non-dollar payment mechanisms are all being deployed as geopolitical and financial instruments to support the internationalization of the yuan.
It is clear that this rise is the result of a deliberate state policy, further bolstered by payment infrastructures. China’s Cross-Border Interbank Payment System (CIPS) is now active in over 110 countries. Beyond serving as an alternative to SWIFT, this system forms the backbone of a China-centric financial network. The 20% increase in yuan usage recorded in 2024, particularly with Belt and Road countries, renders the geopolitical impact of this network even more visible.
Yuan Usage and Türkiye
This transformation is not limited to Asia or Africa; Türkiye has also become a concrete participant in this process. The three-year local currency swap agreement signed between the People’s Bank of China and the Central Bank of the Republic of Türkiye—renewed as of 2025—has reached a volume of 35 billion yuan and 189 billion Turkish liras. During the same period, the opening of the “Turkish RMB Clearing Bank” in Istanbul by ICBC, one of China’s largest banks, marked a significant step in institutionalizing the yuan’s financial infrastructure in Türkiye. Furthermore, the 2.9 billion yuan loan provided to Turkish Airlines by the Bank of China heralded a new era aimed at conducting trade and financing between the two nations directly in yuan.
The truly remarkable aspect of the yuan’s ascent is that these developments are the product of a centralized strategy. China is building monetary power beyond financial hubs—in ports, railways, energy corridors, aviation financing, and trade routes. In this regard, the yuan is evolving from a conventional reserve currency into a strategic instrument that expands China’s global sphere of influence.
Xi Jinping’s Vision of a Financial Powerhouse
Xi Jinping’s definition of a “strong financial nation” reflects this holistic perspective: a potent national currency, an effective central bank, globally competitive financial institutions, financial hubs capable of attracting international capital, and a state capacity to dictate the rules of finance. These goals clarify that China views the financial element as a strategic domain as vital as defense or diplomacy.
To be sure, this path is not without its obstacles. China faces significant hurdles in areas such as capital movement restrictions, legal transparency debates, and market depth. However, China’s distinction lies in its aim to overcome these barriers through long-term state planning rather than denying them. The rise of the yuan is envisioned not as a sudden leap, but as a controlled, cautious, and patient ascent.
The Architects of Global Transformation: Xi Jinping, the CPC, and China
At this stage, the yuan has not yet displaced the dollar. However, what is now clear is that the global financial system is no longer unipolar, and China is one of the strongest contenders in this new multipolar order. We are entering an era where national currencies are regaining significance, finance is being repoliticized, and economic sovereignty is defined by monetary control. China is not merely observing this era; it is aspiring to shape it. The yuan serves as the economic vehicle of this ambition, the Communist Party of China acts as the political engine of the process, and Xi Jinping emerges as the architect of this transformation. The coming years will see both the rewriting of economic balances and the very definition of money itself. In this narrative, China has taken its place on the stage as a power intent on rewriting the rules of the game.
Opinion
The women who refuse to be erased: On Japan’s surrender anniversary, the fight over wartime sexual slavery continues
BUSAN, South Korea — On the day Japan marks the 81st anniversary of its surrender in World War Two, a conference room in Busan’s city council building has become the latest front in a battle over memory.
Allan Wilson, Journalist
Last month, on 23 July, academics, activists and lawmakers gathered here for a symposium on one of the war’s most painful legacies: the estimated tens of thousands of women — euphemistically labelled “comfort women” — forced into sexual slavery by the Imperial Japanese Army. The event was co-hosted by the Carter Human Rights Center’s Asia division and the Korean Women’s Forum.
“The records of the Japanese military’s comfort women are historical assets that the international community must preserve together,” Nam Myung-sook, the Busan city councillor who co-organised the symposium, told the gathering. “Social consensus must be broadened.”
Her words were aimed at more than the audience in the room.
For three decades, survivors and their advocates have pressed Japan for a full and unequivocal accounting. They have met a familiar pattern: moments of apparent progress — the 1993 Kono statement acknowledging military involvement, the 2015 bilateral agreement with South Korea — followed by retreat. Japanese officials continue to dispute the term “sexual slavery.” Textbooks soften the language. Senior politicians visit Yasukuni Shrine, where convicted war criminals are honoured alongside the dead.
The symposium came as UNESCO’s World Heritage Committee convened in Busan, and the timing was deliberate. One of the gathering’s stated goals was to revive the push to have comfort women records inscribed on UNESCO’s Memory of the World register — an effort Japan has repeatedly blocked.
“Our aim is to reaffirm the historical facts of comfort women (受害) to the international community and explore directions that contribute to peace and human rights,” said Yu Ying-mo, senior adviser to the Carter Human Rights Center’s Asia region, in remarks prepared for the event.
A statue, a warning
The symposium also addressed an incident that has become a diplomatic flashpoint: the recent removal of a comfort women memorial statue in Taiwan.
The statue, one of dozens erected across East Asia and beyond, was taken down in recent months. Organisers in Busan described the removal as “an erroneous approach that erases historical wounds and weakens collective memory,” according to the symposium’s programme.
For advocates, the Taiwan case illustrates what happens when political pressure is allowed to dictate historical memory. “Statues, memorial halls, and archives related to comfort women are important spaces of memory that testify to the victims’ suffering and history,” the Carter Human Rights Center said in its written address. “They must be respected.”
Dozens of comfort women memorials now stand in cities from Seoul to San Francisco to Berlin. Each has become a site of diplomatic friction: Japan’s government has consistently objected to them, arguing they perpetuate what it calls an inaccurate narrative.
The shrinking window
Time is running out. Of the few hundred women who came forward in the 1990s, the number of surviving registered victims in South Korea has dwindled to single digits.
This demographic reality has injected new urgency into the preservation effort. Shim Ok-ju, a research professor at George Mason University Korea, told the symposium that the focus must now shift from oral testimony — soon to be lost — to documentation and education.
Seo Kyung-soon, a professor at Pukyong National University, presented findings from the so-called “Gwanbu Trial” records — a series of postwar legal proceedings in which comfort women sought compensation through Japanese courts. The documents, she argued, contain incontrovertible evidence of state orchestration.
A designated discussant panel followed, bringing together Kim Tae-wan, a political science professor at Dong-eui University; Kim Kyung-hee, an independent researcher; and Ahn Jun-young, a journalist from the Busan Ilbo newspaper. The format was designed to bridge academia and public consciousness — to test whether scholarly findings could survive the scrutiny of working journalists and political scientists.
The international dimension
The comfort women issue has never been purely bilateral. In 1996, the UN Special Rapporteur on violence against women concluded that the system constituted “military sexual slavery.” In 2022, the UN Committee on the Elimination of Discrimination against Women urged Japan to “ensure that the issue is accurately reflected in school curricula.”
Yet the gap between international consensus and Japanese government policy remains wide. Prime ministerial statements offer “apologies and remorse” but stop short of accepting legal responsibility. Reparations have come from private funds, not the state.
For organisers of the Busan symposium, the path forward runs through multilateral institutions. UNESCO recognition, they argue, would make historical revisionism harder to sustain. But Japan has made clear it will oppose any such move, as it did when Chinese documents related to the 1937 Nanjing Massacre were inscribed in 2015.
“Facing history squarely and respecting it is a fundamental value that the international community should share,” the symposium’s organisers concluded.
This 15 August, as Japan observes its National Memorial Service for the War Dead, the women who survived — and those who did not — will be remembered in rooms like the one in Busan. Their numbers are dwindling. The question is whether their story will outlast them.
Opinion
The U.S. Economy and NATO’s Function
Although the U.S. President Trump has repeatedly told his counterparts and the rest of the world to “trade with the United States” and “invest in the United States,” he has so far failed to get the results he hoped for. There are several reasons for this.
First, the United States is no longer as attractive as it once was. Second, China, America’s biggest rival, stands out as a more attractive country for production and investment not only for the rest of the world but also for major U.S. companies themselves. This is because the United States simply cannot compete with China when it comes to production costs. China produces far more, at much lower cost. Moreover, it produces high-quality goods and is rapidly building global brands. For this reason, President Trump’s call on U.S. companies to dismantle their factories in China and relocate them to the United States has also failed to generate the response he expected.
Trump has repeatedly called on European entrepreneurs, investors, and business leaders to invest in the United States as well. “Build your factories in the United States. We will offer you the most favorable and lowest tax rates in the world. Otherwise, you will continue to pay high tariffs. In fact, we will raise those tariffs even further,” he said. It was virtually a threat. Yet despite this, he failed to attract the level of interest he expected from Europeans either.
It is impossible for this picture regarding the economy, trade, and tariffs not to have repercussions for politics and foreign policy. Therefore, when the United States fails to receive the response it expects to its economic invitations and trade proposals, it increasingly resorts to political pressure and foreign-policy threats. On NATO, Trump scolds his European allies. He pressures Europeans to contribute more to NATO. At times, he goes even further, virtually threatening them by saying that the United States could withdraw from NATO. Europe’s leaders, each more miserable and ignorant than the next, sit beside the U.S. president and swallow his insults. Sometimes they even applaud him.
WOULD THE UNITED STATES LEAVE NATO?
The United States will not leave NATO. Having used NATO very effectively, invested so heavily in the alliance, and gained enormous influence through NATO over its allies’ domestic and foreign policies—from their economies to their defense and security policies—the United States will not give it up. If the United States were to leave NATO, the alliance would lose its current meaning, effectiveness, and deterrent power. No NATO member could fill the vacuum left by the United States. Alongside America’s political, economic, military, industrial, and technological weight, it should also be remembered that the United States covers 14.9 percent of NATO’s common budget and accounts for 57 percent of total defense spending within the alliance.
We know that NATO’s European members have neither the strength, courage, political will, nor money to stand up to the United States in pursuit of a “more European NATO.” Nor is there any consensus among them in this regard. The idea of a European defense and security identity that is at least somewhat distinct and autonomous from NATO, occasionally championed by Germany and France, should not be taken too seriously either. Berlin and Paris have failed to persuade NATO’s other European members on this issue. Groups such as the European Political Community, which was brought to the agenda after the Ukraine-Russia war in an effort to also bring in countries such as Turkey and Britain, which are NATO members but not EU members, likewise have little function, influence, or weight.
A few years ago, President Trump demanded that NATO members raise defense spending from 2 percent to 5 percent of GDP by 2035. There was no serious objection to this demand. This alone is one indication that NATO is important to the United States not only politically and militarily but economically as well. America’s influence within NATO also benefits the U.S. arms industry, the largest in the world.
Because Trump wants to turn the United States once again into the world’s foremost manufacturing hub, increase exports, and attract more investment into the country, the defense industry is also of great importance within this broader agenda. Since lowering energy costs is essential to achieving this, Trump both sidelines environmentalist energy projects at home and, as in the case of Venezuela, abducts the leader of an energy-rich country and virtually seizes control of its energy resources. Trump knows that otherwise the United States will struggle to compete with China, and that it is impossible for America to produce more, produce more cheaply, and sell more than China, which is far ahead of the United States in global manufacturing.
That is why, as was once again evident at the NATO summit held in Turkey, discussions within NATO about strategic threats and deterrence, regional security and energy corridors, partnerships and global networks all ultimately serve U.S. priorities and interests. Whether this is explained in terms of geopolitical balances, economic interests, regional dynamics, security needs, diplomatic pressure, or all of these factors combined, NATO is an instrument of aggression and occupation serving U.S. imperialism.
Opinion
China Is Not Pulling Up the Industrialization Ladder
A recent Peterson Institute for International Economics paper advances what it calls the “China Squeeze.” It argues that China, despite moving into more advanced industries, has not withdrawn from labor-intensive sectors. By continuing to compete in these markets, the paper claims, China is blocking poorer countries from following the traditional path to industrialization. It accuse China for climbing the development ladder and then pulling it up.
This argument misreads how industrial development and production relocation actually work. It treats China as a single, economically homogeneous country and overlooks the infrastructure, supply chains and market access that industrialization requires.
It assume that as Chinese wages rise, China should vacate traditional industries and make room for poorer economies. If it does not, it is supposedly trying to “retain comparative advantage in everything.”
But China is not composed only of Shanghai, Shenzhen and other prosperous coastal cities. It also has a vast interior, a large population and enormous regional differences in wages, land costs, industrial structures and stages of development. When manufacturing moves from Guangdong, Zhejiang or Jiangsu to Anhui, Jiangxi, Hubei or Sichuan, the economic logic is not fundamentally different from a factory moving from China to Vietnam or Indonesia. Both represent the relocation of production in response to changing costs and capabilities.
China’s internal development gap means that the entire country cannot be expected to exit an industry simultaneously. Ignoring domestic industrial relocation while focusing exclusively on production crossing national borders makes China’s continued presence in traditional manufacturing appear far more anomalous than it is.
The “China Squeeze” argument also understates the scale of China’s outward industrial relocation. A growing number of developing economies import Chinese machinery and components, process or assemble them locally, and then export finished goods to the United States, Europe and other markets. Like what McKinsey describes in its report, China’s changing role as a shift from the “factory of the world” to a “factory to the factories.” In 2025, China’s exports of consumer goods declined by about 2 percent. Its exports of intermediate goods, however, rose by 9 percent, while capital-goods exports increased by 5 percent. The fastest-growing categories included semiconductors, memory chips, lithium-ion batteries, smartphone components and industrial machinery.
In other words, China increasingly exports not only products for final consumption but also the equipment and inputs that allow manufacturing to expand elsewhere. In many emerging supply chains, China supplies machinery and components while developing economies take on assembly, processing and other stages of production.
This does not mean that there’s no competition. It means that the relationship cannot be reduced to the proposition that every additional product made in China is one fewer product made elsewhere. Developing economies can be both competitors with China and participants in production networks supported by Chinese inputs.
The deeper problem with the “China Squeeze” theory is that it ignored the fundamental elements for industrial transfer to happen. Export performance also depends on productivity, electricity supply, port efficiency, financing costs, supplier networks, industrial clusters, technology and local governance.
A factory leaving China does not means it will reappear in Bangladesh or Tanzania. Production relocation requires reliable electricity, functioning roads and ports, a basically educated workforce, effective customs administration and a reasonably predictable investment environment, These were precisely the conditions that China possessed on the eve of reform and opening-up.
Industrial clusters also generate powerful economies of scale. A garment factory needs nearby suppliers of fabric, dyes, buttons, zippers and packaging, as well as efficient logistics. An electronics plant depends on chips, screens, batteries, molds and precision components. Moving a factory to the country with the lowest wages does not necessarily produce the lowest overall costs. Wages are only one part of the equation; a functioning industrial ecosystem is often more important.
Seen from this perspective, one of the Belt and Road Initiative’s most important contributions has been to help developing economies build the conditions needed to receive industrial investment. Ports, roads, railways, power plants and communications networks are not incidental to industrialization. They are what make industrialization possible.
Industrial capacity must also be connected to consumer markets. Here, too, China is moving in a direction that the “China Squeeze” narrative overlooks. Since May 1, 2026, China has applied zero tariffs across all tariff lines to imports from all 53 African countries with which it maintains diplomatic relations.
The significance goes beyond increasing African exports of commodities and agricultural products. Combined with Chinese infrastructure, investment and industrial parks, greater access to the Chinese market could encourage more goods to be processed and manufactured in Africa before export—creating local employment, value added and productive capacity. China should now complement tariff removal with simpler customs, inspection and certification procedures so that African producers can make full use of this access.
Competition is real, but industrialization is not a zero-sum game and China is not pulling up the industrialization ladder. The “China Squeeze” thesis counts the competitive pressure created by Chinese exports while largely ignoring the opportunities created by Chinese investment, infrastructure, intermediate goods and market access.
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