During the year, China's trade surplus with the U.S. and the rest of the world widened in October as the global recovery buoyed demand for made-in-China goods, helping export growth beat market expectations for a seventh straight month.
Experts agree that China is one of the countries that successfully dealt with the pandemic while also showing a healthy economic recovery pace.
China: Key Driver of the Global Economy From Pandemic
Meanwhile, with soaring numbers of deaths and new cases from the Covid -19 pandemic and a solution nowhere near, the U.S. government has employed a rescue program to contain the crisis, even though this caused its national debt to increase by some 20 percentage points, equivalent to 130% of its GDP (Gross Domestic Product) in 2020.
Meanwhile, in recent months, China has been able to reactivate its economy. According to a report published in the German newspaper, Die Welt, its national debt has increased by about ten percentage points, equivalent to 66% of its GDP.
In this sense, analyst Gunther Schnabl has remarked that not only do China's finances seem stable but the establishment of the Regional Comprehensive Economic Partnership (RCEP), the largest free trade agreement in the world with the Asian giant at the head and without the participation of the United States, reinforces Beijing's leadership in East Asia.
According to Schnabl, the yuan has not yet become the leading regional currency due to the Chinese financial market regulation. A free and developed financial market must always accompany the world currency.
Suppose the yuan continues to appreciate against the dollar due to the economic difficulties of the United States. In that case, many Asian countries will find an incentive to replace their dollar reserves with yuan reserves. A likely outcome of this trend is that the Chinese currency may eventually become the leading regional currency and displace the U.S. dollar.