Alliances, Agreements, And Reserve Currencies

Competition is heating up worldwide, even as sports seem to be in retreat. Competition among nations reaches nearly every corner of activities, from space and medicine to technology and weaponry. At a higher level, a competition between ways of attracting allies is emerging, a competition between geo-economics and geo-politics. The U.S., with its superpower status and influential reserve currency, continues along its geo-political pathway, while China, with lots of capital and often innovative ideas, is using geo-economics to spread its influence. But China’s use of the geo-economic approach has a larger purpose than just gathering allies through financial arrangements or challenging the stability of historic alliances. Beijing is seeking equivalency of its economy and its currency with those of the U.S., which could represent a challenge to the dollar’s primacy as the world’s lone reserve currency.