Political and International Approaches

Political and International Approaches

Currency diplomacy; The politics of china in international financial system

Document Type : Original Article

Author
davood karimipour
Assistant Professor of international Relations.Department of National Security, Iran National defence University. Tehran. Iran.
10.48308/piaj.2024.236544.1569
Abstract
National currencies go through a tortuous path to rise to the international level, which, while requiring some economic preconditions inside and outside a country, leaves an undeniable impact on the international power of a government. . Currency diplomacy, as a tool that regulates the international financial power of a country, has now become one of the most important issues in international political economy. Although the scope of this discussion is wide, the main issue of this article is to explain the emergence of international financial powers. Indeed, what tools does foreign exchange diplomacy have to achieve this goal? The study of China's foreign exchange diplomacy shows that Beijing follows three levels of foreign exchange diplomacy including unilateral, bilateral and multilateral. At every level of its foreign exchange diplomacy, China has followed a range of measures, including offshore hub building, capital export, exchange rate management, etc., which has finally managed to change the position of the yuan from the national and peripheral levels to the regional level. Belt-way upgrade. Although many believe that the path taken by China is different from that of the dollar or sterling, the evidence shows that if China's economic growth and stability continue, the realization of the internationalized yuan will not be far from expected. The results of the research show that the interaction with China for countries like Iran should follow the path of multilateral to bilateral monetary agreements. The findings show that China uses various political and economic mechanisms to promote its international financial power. Two key factors have played a key role in the success of digitalization of the yuan, which includes the Belt and Road initiative and the creation of an extraterritorial hub that China Congo and other countries have created. Hank Gang's financial headquarters in Ibtikari has launched a multi-sided digital exchange bridge, which is called M-Bridge. Based on this plan, China, Hong Kong, Thailand, the Emirates and the Bank for International Settlements, using this initiative, were able to transfer nearly 171 million Hong Kong dollars on the multilateral currency bridge in 2022. Also, the Chinese have significant opportunities for the promotion of digital yuan in the Belt and Road initiative. Since many southern countries lack the financial infrastructure to match the dollar, transfers will be complicated and expensive. Therefore, if China wants to use the digital yuan in the new Silk Road, which is a complement to the Belt and Road initiative, and in the form of which China exports its technologies to countries that are looking for a leap, countries receiving loans from this They use the opportunity to replace the digital yuan by reducing the reliance on the dollar. Two key factors have played a key role in the success of the digitalization of the yuan, which includes the Beltway initiative and the creation of extraterritorial hubs that China has created in Hong Kong and other countries. Hank Gang's financial headquarters in Ibtikari has launched a multi-sided digital exchange bridge, which is called M-Bridge. Based on this plan, China, Hong Kong, Thailand, the Emirates and the Bank for International Settlements, using this initiative, were able to transfer nearly 171 million Hong Kong dollars on the multilateral currency bridge in 2022. Also, the Chinese have significant opportunities for the promotion of digital yuan in the Belt and Road initiative. Since many southern countries lack the financial infrastructure to match the dollar, transfers will be complicated and expensive.
Keywords
Currency diplomacy
international financial politics
money
China
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