What Does China Want?
by Richard Russell
Does anyone know what China really wants and in which direction China is going?
The Russell answer: China wants to be the most powerful financial power on the planet. Note that I said China wants to be a “financial power,” not a military power. Militarily, China simply wants to neutralize the US, and be on a military level with the US. China knows that nobody can win the next major war between super-powers (both sides would be utterly destroyed).
China’s initial financial strategy – to make the yuan (renminbi) the world’s leading currency. China wants the yuan to take the place of the US dollar in world trade and they want the yuan to be the world’s reserve currency. China is going about this in slow, deliberate steps.
First, China is making strategic alliances with a long list of nations. This means that they will trade, using currency swaps in China’s currency, the yuan. This will result in eliminating trade in US dollars. The Chinese alliances include Malaysia, Belarus, Hong Kong, Indonesia and more recently Brazil and Argentina.
China is also moving to create currency swaps with the Arab nations. More ominously, this means that China ideally wants oil quoted and traded in yuan rather than as it is currently quoted and traded – in dollars.
What’s behind China’s new strategies? The fact is that China has been smarting under many decades of bad-mouthing and disrespect. China is a nation of 1.3 billion hard-working people, a nation pulling itself out of deadening poverty and fast-becoming the leading economy of the world. Today, no trend or major deal is transacted without considering it’s affect on China or China’s affect on the transaction.
It’s obvious that China wants the yuan to be the world’s new reserve currency. Ask yourself this – if you are dealing with a currency, would you rather deal with the currency of a nation with a huge hard-working population, a nation with the largest reserves on the planet – or would you rather deal with the currency of a nation drowning in debt, a nation whose currency is in a multi-decade decline, and a nation which is steadily losing its productive and manufacturing capabilities?