Ever since Joe Biden took office, the Chinese and Russian governments have been doing everything they can to mess with the President. China’s sudden demand that Taiwan be “returned” to them as part of the “One China” policy and their pressure on South American nations to use their currency has been strong. Going along with their new ally, Russia has been using Chinese money for its oil sales to numerous nations and organizations. These groups are willing to forego the embargo placed on Putin for his invasion of the leftist money-washing epicenter of Ukraine. Now Bolivia has added its name to this list of nations.
Between May and July of this year, Bolivia conducted roughly 10% of its foreign import and exports in the Chinese yuan. This translates to roughly $38.7 million, or 278 million Chinese yuan, according to Economy Minister Marcelo Montenegro on July 27th. Speaking to reporters, he seemed very pleased with himself.
“We’re already using the yuan. It’s a reality and a good start. Banana, zinc, and wood manufacturing exporters are conducting transactions in yuan, as well as importers of vehicles and capital goods. The amount being used in yuan is still relatively small, but it will increase over time.” Processed on Bolivian-owned Banco Union, the nation is in complete control of how they are using this yuan.
China is putting increased pressure on other nations to start using their yuan. So far, Bolivia is joining Brazil and Argentina in using the yuan. All three nations are also run by oppressive leftist governments. So, while they are aligned with Biden politically, they are where Biden could only dream of going. Across Latin America and the Caribbean, the use of the yuan is increasing, with many nations now looking to become tighter with China and getting away from reliance on the US.
Benjamin Gedan serves as the director of the Latin America Program at the Washington-based Wilson Center. He has seen what this change is doing in China as well as in Washington. “There is a lot of anxiety in Washington about threats to the special role of the dollar in regions like Latin America. China’s new role as a lender of last resort in Argentina, and the use of the yuan for international trade by Bolivia, are a sign of the times.”
Earlier in the year, Argentina’s government unveiled a plan for using the yuan to pay for foreign imports, as well as keeping its foreign reserves built up as much as possible. Their debt with the International Monetary Fund could also be paid back in the Chinese yuan. Brazil, which has been using the Euro for years now, suddenly had the yuan surpass it for the second most crucial currency for their foreign reserves. When 2022 concluded, they had 5.37% of its currency in the Chinese yuan, with 4.74% in Euros.
With rapidly rising interest and inflation due to Biden-nomics, the US dollar has been losing popularity and security on the global stage. His poor decision-making has caused other nations to wonder why the US dollar suddenly became the currency of the world after the gold standard went away. A fair question to many businesses around the world, but a devastating one here in the US.
For Beijing, this has been a dream come true. For years now, they have been trying to become more prominent on the international stage. While nobody has forgotten they exist or that they have a currency system, it just wasn’t seen as reliable or stable enough to conduct big business in. Since Biden took office, though, the Chinese have sprung to life as Biden drags the US economy into the dirt.
This combination has allowed President Xi Jinping to create the perfect storm. Pushing a necessity to lower-level countries, all while strengthening his own economy by buying the economy up. Given the amount of US debt he has shorn up their foundation with, he has built the country a financial platform for success, and Biden is just helping him more and more.