Trump Tariffs and policy unpredictability in the USA is now pushing China away from the US Dollar. China is diversifying its foreign reserves and eases gold restrictions.
The Economist reports: "China is ditching the dollar, fast".
— Ben Norton (@BenjaminNorton) September 13, 2025
Over 30% of China’s trade in goods & services is now done in its own currency, RMB.
China settles over 50% of its total cross-border receipts (including financial flows) in yuan, up from less than 1% in 2010.
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As per reports, the Chinese Government is using Yuan (RMB) to settle over 50% of its total cross-border receipts. State Administration of Foreign Exchange data recorded that Renminbi was used for 53% of China’s cross-border payment in the first half of 2025.
China backs gold more than US Treasuries
The Chinese Government is selling US government debt to diversify its foreign reserves. The drop in US Treasury securities is now becoming increasingly noticeable. From $783.4 billion in February, US Dollar holdings declined significantly to $757 billion. This sell out of US Treasury securities has put China behind UK as foreign investors in US debt.
Meanwhile, the Chinese Government is easing its regulations over gold imports and exports. As per Bloomberg, China, the world’s largest consumer of precious metals, is eyeing to issue “multi-use permits” for faster approval system and increasing the number of ports that can validate them.
According to the People’s Bank of China (PCOB), the shift is intended to “enhance vitality and respond to external shocks by improving business environment at ports.”
Macro Investor Luke Gromen lauds Chinese move
Ace analyst and macro investor Luke Gromen praised China’s move to reduce its US Treasury securities while importing more gold.
He said, “In theory, state-backed bank, state-backed debtor: debtor defaults on the bank, both state-backed, no loss. There’s no ability to flow out except on a limited basis through gold, but you already pre-loaded your citizens for 20 years with gold.“
“So the only way to capital in any real way out of China is for the price of gold to go up a lot in Chinese yuan… The gold that all of its citizens have been front-running for 20 years goes up. Their balance sheet goes up in yuan terms.”
US Dollar hit low levels while demand for Euro surge
Independent think tank OMFIF (Official Monetary and Financial Institutions Forum) headquartered at UK conducted a survey which predicted Euro to reach about a 22% share of global reserves in 10 years’ time.
Kenneth Rogoff, former IMF chief economist, said, “The euro’s share of global reserves will almost surely rise over the next few years, not so much because Europe is viewed so much more favourably, but because the dollar’s status is diminished.”
USA builds pressure on India as China moves away from Dollar
While the Chinese Government is moving away from the Dollar, the USA is busy in antagonising India. US Secretary of Commerce, Howard Lutnick was criticized for his remarks during an interview with Axios. Lutnick demanded that India buy American corn.
He said, “India Brags that they have 1.4 Billion people, then why wouldn’t they buy one Bushel(25.40Kg) of corn from us. They won’t buy our corn. They put down tariffs on everything. You either accept it or you are going to have a tough time doing business with the world’s greatest consumer.”
