So, nice little chart here:
Seems… bad. At least for America and Europe.
Let’s lay this out:
- Most of what you want to buy you can buy from China, you don’t need to get it from the West, so why use dollars?
- China almost never uses sanctions or seizes foreign currency. The US often does. US dollars are risky, the right to use them can and is often taken away, and so often are the dollars themselves.
So why use the dollar, except that it’s still easier in some cases?
What happens when it’s no longer easier? The BRICS are spending a lot of time on an international banking system which bypasses the West and it’s allies (Japan and South Korea, basically). As that system becomes easier to use, why use the Western system or the dollar? It only exposes you to risk.
This is similar to what happened after the Huawei sanctions. Chinese firms saw the damage that was done to Huawei (they’ve roared back, but it was touch and go for a couple years.) The cry in Chinese business was “delete America.” If you bought anything important from the US you needed to find another source outside of the West, which for manufactured goods usually meant domestically, and for resources meant Africa, South America and Russia.
For a long time the way the banking system was set up you had to use the dollar, but more and more you don’t. And for a long time some key providers, like oil producers, would only take dollars, but now they’ll take Yuan.
So, again, why use the dollar when there is a safer alternative which can be used to buy or sell almost anything you want?