Relevance of China in global finance

Abstract

After four decades of structural reforms, China is at a historic turning point: from basically relying on exports, to being one of the world's largest producers, consumers and investors, with a significant presence in global finance. It is true that in recent years problems have appeared, and that uncertainty is glimpsed in the future, but the Chinese authorities still have room to confront them, and on the other hand they continue to develop initiatives aimed at expanding the country's presence in the economy and the world finances.

In this paper, in the first place, the various aspects of the Chinese presence in world finances are exposed, such as the size of its financial system, the holding of US public external debt, the progressive international presence of the yuan, manifested by its entry into the composition of the Special Drawing Rights, and the increase of Chinese investments abroad. Also, the initiatives of the Chinese authorities to increase their country's presence in the world are considered, such as the "Belt and Road Initiative", the "China effect" as the creative force of a new global economic and financial architecture leading the BRICS group, bilateral agreements and treaties of a commercial, monetary and investment nature, and the development of an international market for physical gold in yuan. Finally, the challenges faced by the Chinese rulers are considered for such initiatives to achieve their objectives.