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It is now just 10 months since China launched its oil futures contract, denominated in yuan (renminbi), on the Shanghai International Energy Exchange.The Chinese oil futures contract is, however, being taken seriously by multinational commodity traders (like Glencore) and is priced in a manner that is comparable to the Brent and WTI indices. As we argue in The Asia-Pacific Journal, these results suggest that China's oil futures could bring the renminbi to the core of global commodity markets.The establishment of renminbi-based oil trading at a time when China and many other economies confront aggressive U.S. tariffs, and possible further development of renminbi-based trade in other commodity markets, suggests the U.S. dollar could face an unprecedented challenge to its hegemony.If China's ultimate goals include internationalizing the renminbi, its more immediate objective, prompted in part by U.S. tariffs or sanctions on China and others, is dedollarization of the international system.
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