A neutral global currency can solve geopolitical trade imbalances, says Hong Kong-based economic expert
In October 2020, roughly a month before Donald Trump was elected out of office in favour of Joe Biden, Raymond Yeung published his book China’s Trump Card: Cryptocurrency and its Game-Changing Role in Sino-US Trade (2020). In it, he outlines the role of digital currency in geopolitical affairs, especially when it comes to the relationship between China and the United States.
“When I wrote this book, I was just testing my ideas, but now the last four years [are] clearly telling you this is actually happening,” Yeung said while also admitting that back then, his ideas didn’t sell well.
He even joked that China’s Trump Card made it to the New York Times’ “Worst Sellers” list and that his publisher refused to print any more copies.
Yeung made these remarks while sitting next to Professional Committee Member Andrew Chan at an FCC Club Lunch in October — roughly a month before Donald Trump was re-elected to serve as the 47th President of the United States.
As the Chief Economist for Greater China at ANZ, Yeung shared an overview of the world’s trade issues, as well as cryptocurrency dynamics and what he thinks will help fundamentally different governments navigate through economic tension.
“Openness is the key word,” Yeung said when describing how blockchain has been used in attempts to mitigate some of these issues.
However, Yeung finds that blockchain’s impact is small and can’t be used as a blanket-solution to worldwide problems. Instead, Yeung suggested that the International Monetary Fund (IMF) create a neutral cryptocurrency that can be used by every country across the world. The appeal of this move is so that transactions are decentralised and not limited by banking restrictions.
“The best way to address trade imbalance is [by] establishing a global-first, apolitical, very neutral global currency. [This] is the only way to solve the global impact,” Yeung explained.
Yeung also used the talk to break down some of the terms he created in writing China’s Trump Card, particularly the phrase “factory-dollar recycling”.
With the concept of the US Dollar (USD) being a direct exchange for oil from Saudi Arabia, Yeung uses factory-dollar recycling to describe the relationship between USD and the Chinese Yuan, or Renminbi (RMB). In the same way that the value of USD is directly linked to oil, Yeung explained that this is exactly how China uses RMB in exchange for USD.
This explanation prompted moderator Andrew Chan to ask whether or not oil would one day be substituted by different valuable resources.
Yeung agreed that we now live in a world with a “multi-polar system” and maintained that if this becomes the case, a blockchain solution can help retain trust in a new, global financial environment.
To watch the full discussion between Raymond Yeung and Andrew Chan, please visit the FCC’s YouTube channel:
