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The Rise of China and the End of US Dollar

Will the growing financial position of China, new Yuan Denominated Futures and International Sanctions reduce the usage of US Dollars? How will it affect commodity markets?

Global Trade patterns are always changing and we are living a new transition. The US Dollar has dominated global transactions for a century but its position is now being challenged. China has become a key trading country and is accounting now for the lion share of commodity flows. China has started to use the YUAN for international transactions and has developed commodity futures denominated in YUAN. Commodity traders are now issuing YUAN-denominated bonds in China to raise funds.
Chinese banks becoming more involved in trade and shipping finance. Will the YUAN-Denominated futures become new benchmarks for commodity traders? Will China become a key financial hub for commodity trading and shipping companies?

Chinese state-owned commodity trading companies have grown significantly these past years leading to giant trading groups such as COFCO and UNIPEC. Are these companies now large enough to impose YUAN-denominated contracts or YUAN-based commodity benchmarks? US sanctions have also forced sanctioned countries to use other currencies for international transactions. Will the renewed US sanctions against Iran encourage further use of other currencies such as the Yuan? Is it the start of the decline of the US Dollar as the most used currency for international trade ? How will this affect Commodity trading?

The CTA has decided to explore this thematic during its Annual Conference and will invite a represent of a Chinese State-owned commodity trading company, someone from trade finance, an economist and someone from the Swiss-China chamber of commerce to discuss this topic.



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