The Start of De-Dollarization: China’s Gradual Move Away from the USD

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May 22, 2024 The Start of De-Dollarization: China’s Move Away from the USD

Since 2010, the majority of China’s cross-border payments, like those of many countries, have been settled in U.S. dollars (USD). As of the first quarter of 2023, that’s no longer the case.

This graphic from the Hinrich Foundation, the second in a three-part series covering the future of trade, provides visual context to the growing use of the Chinese renminbi (RMB) in payments both domestically and globally.  

The De-Dollarization of China’s Cross-Border Transactions

This analysis uses Bloomberg data on the share of China’s payments and receipts in RMB, USD, and other currencies from 2010 to 2024. 

In the first few months of 2010, settlements in local currency accounted for less than 1.0% of China’s cross-border payments, compared to approximately 83.0% in USD. 

China has since closed that gap. In March 2023, the share of the RMB in China’s settlements surpassed the USD for the first time.

DateRenminbiU.S. DollarOther March 20100.3%84.3%15.4% March 20114.8%81.3%13.9% March 201211.5%77.1%11.5% March 201318.1%72.7%9.2% March 201426.6%64.8%8.6% March 201529.0%61.9%9.0% March 201623.6%66.7%9.7% March 201717.6%72.5%9.9% March 201823.2%67.4%9.4% March 201926.2%65.1%8.7% March 202039.3%54.4%6.3% March 202141.7%52.6%5.6% March 202242.1%53.3%4.7% March 202348.4%46.7%4.9% March 202452.9%42.8%4.3%

Since then, the de-dollarization in Chinese international settlements has continued.  

As of March 2024, over half (52.9%) of Chinese payments were settled in RMB while 42.8% were settled in USD. This is double the share from five years previous. According to Goldman Sachs, foreigners’ increased willingness to trade assets denominated in RMB significantly contributed to de-dollarization in favor of China’s currency. Also, early last year, Brazil and Argentina announced that they would begin allowing trade settlements in RMB. 

Most Popular Currencies in Foreign Exchange (FX) Transactions

Globally, analysis from the Bank for International Settlements reveals that, in 2022, the USD remained the most-used currency for FX settlements. The euro and the Japanese yen came in second and third, respectively.

Currency20132022Change (pp) U.S. Dollar87.0%88.5%+1.5 Euro33.4%30.5%-2.9 Yen23.0%16.7%-6.3 Pound Sterling11.8%12.9%+1.1 Renminbi2.2%7.0%+4.8 Other42.6%44.4%+1.8 Total200.0%200.0%

The

Comparing New and Current U.S. Tariffs on Chinese Imports

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May 16, 2024 Article/Editing: Graphics/Design:

See this visualization first on the Voronoi app.

U.S. Announces New Tariffs On A Range of Chinese Goods

This was originally posted on our Voronoi app. Download the app for free on iOS or Android and discover incredible data-driven charts from a variety of trusted sources.

This week, the U.S. introduced a new series of tariff increases on Chinese imports, amounting to over $18 billion worth of goods.

In the announcement, President Biden said they are aiming to “counter China’s unfair trade practices” by targeting specific sectors where the U.S. is boosting domestic production.

This graphic shows the new and current U.S. tariff rates set on a variety of Chinese imports.

Tariff rates and implementation years for the new rates come from The White House’s May 14 press release announcing the new tariff rate increases. Implementation years for the current rates comes from the Office of the United States Trade Representative (USTR) and United States International Trade Commission (USITC).

Tariff Raises on China Hit EV and Medical Industries

Below, we show the current and new tariff rates, as well as the implementation years for both, for a range of Chinese imports, as of May 14, 2024.

ImportCurrent rateNew rateImplementation year (current rate)Implementation year (new rate) Electric vehicles (EVs)25%100%20182024 Semiconductors25%50%20182025 Solar cells25%50%20182024 Syringes and needles0%50%N/A2024 Some steel and aluminium products*†7.5%25%20192024 Lithium-ion EV batteries7.5%25%20192024 Lithium-ion non-EV batteries*7.5%25%20192026 Battery parts*7.5%25%20192024 Some personal protective equipment (PPE)*†7.5%25%20192024 Rubber medical and surgical gloves*7.5%25%20192026 Natural graphite and permanent magnets0%25%N/A2026 Other critical minerals0%25%N/A2024 Ship-to-store cranes0%25%N/A2024

†Current rate for steel and aluminium products and personal protective equipment ranges from 0 to 7.5%.

*Tariffs implemented in 2019 started at 15% and were reduced to 7.5% in January 2020

The U.S. directed many of its new tariff increases on the Chinese EV industry, targeting imports such as semiconductors, lithium-ion batteries, and other battery parts.

Notably, tariffs on electric vehicles from China were bumped to 100% and new tariffs on certain critical minerals, which are essential for manufacturing battery parts and semiconductors, were introduced.

Medical-related products, such as medical and surgical gloves and certain