Alice Han

What's your view?

It's interesting, when we talked about the five-year plan and the two sessions in a previous episode, we talked a lot about self-sufficiency and de-risking in supply chains.

To your point, when you quoted the PBOC governor, there is, I think, sort of a collision of events right now pointing towards this theme of de-dollarization, whether it's the PBOC governor talking about it, it's coming up in Chinese media,

I think irrespective of what's happening in Iran, it came out of the five-year plan as well to increase CNY usage and trade settlements.

I picked up on a particularly interesting data point.

So China over the last few years has been working with the major central banks of

Hong Kong, Thailand, UAE, and Saudi Arabia, so some of these Gulf states in the Middle East, to increase trade settlements via these central bank bridges, digital tokenized cross-border transactions.

And since 2022, we've seen a 2,500-fold increase

in the use of these tokens through these M-bridges, so to speak.

It's about $55 billion, and around, I think, 95% of that settlement of that sum is in yuan, because China's been the big proponent of it diplomatically and through these financial institutions.

And in the last couple of days, we've seen China announce that they've expanded the number of commercial banks that are going to use ECNY.

I think that one of the longer term themes, maybe from this crisis, is that the Gulf states will become more and more like Russia.

So if we think about the increase in UN settlement between Russia and China since 2022, when Russia invaded Ukraine,

That has been very favorable to CNY usage.

We don't have the exact data on the ground, but there has been an increase in CNY usage in cross-border trade settlement, notably for oil and gas.

I believe a couple years ago, there was a Gazprom deal agreed by Putin and Xi in which there would be a 50-50 yuan-ruble split in terms of settlement.

So I could foresee...

China actually benefiting from the morass and quagmire that the U.S.

has gotten itself into financially by increasing CNY usage in global trade settlement.

Currently, according to SWIFT, it's about 8% of global trade settlement.