China's Export Leadership and Digital Yuan
China's gradual integration into the global economy has fueled its rise for many years. In its strategies, Beijing values the vulnerability of interconnecting with different regions and promotes the "Dual Circulation", a strategy that enhances foreign economic relations while focusing primarily on the domestic market.
Having faced new variables such as a pandemic, war in Europe, tensions with the United States, and critical issues in logistics and value chains, the Chinese leadership has changed and adapted its approach to investment and trade in international markets with domestic reforms that focus on technological innovation and self-sufficiency.
Despite Beijing's position promoting a different global development, President Xi Jinping's New Silk Road project remains the cornerstone of China-World relations. Launched in 2013, this global infrastructure project aims to promote interconnection between each region, with a specific focus on Africa and the Far East. Health crisis and deteriorating relations with the West have shifted the Chinese government's focus to the domestic market, resulting in a slowdown in global integration.
China remains a leader in global trade and the first country in exports. In the first six months of 2022, Chinese trade with the rest of the world expanded by 9.4 per cent compared to 2021, and trade with its top three trading partners - the ASEAN, the EU, and the US - grew by 14.9 per cent, 13.7 per cent, and 12.5 per cent respectively. Among the few countries with a positive trade balance with China in 2021 were Brazil in South America, Germany, Russia, and Switzerland in Europe, Japan and South Korea in Asia, and Australia in the Pacific.
This trend has brought China to the center of a vast network of free trade agreements, including the Regional Comprehensive Economic Partnership (RCEP) involving the countries of ASEAN, Japan and South Korea, as well as Australia and New Zealand creating the most largest free market of the world. Those who keep their investments in the RCEP region will benefit from duty-free trade and increased export flows to China. The weight of Beijing in commerce and trade agreements accelerates the growth of the groups that are present in Asia-Pacific.
The relationship between Chinese markets and foreign price lists is direct because it is part of the recent Chinese control of large specific regulatory groups for their management at a domestic and transnational level, with a correlated impact between different markets.
In addition, Beijing is aiming for an increased use of its own currency, the Yuan, in exchanges with the rest of the world, with an increased use that could be obtained thanks to the digital Yuan, which at the moment has the main purpose of replacing the role of the big tech companies that control domestic financial transactions in the mobile environment.