Comment by jmyeet
7 days ago
The Chinese yuan is not a viable reserve currency. Why? Because it's pegged to a basket of other currencies. It should really inflate in value but Chinese government policy is to undervalue it to aid exports. Exports are ~20% of China's economy. It would devastate the economy if the yuan was allowed to freely float, or at least float with the level of central bank management that other developed nations' fiat currencies have.
China has repeatedly tried to activate a consumption economy (like the US) but the Chinese just save and buy real estate, in part because there is no retirement benefits so they have to self-fund that.
So what currency? Currently, there is no viable alternative to the US dollar. It is backed by the largest economy in the world AND the US military.
You might find people who talk about BRICS like it's a real thing. It is not. It's just a group of randomly selected countries meant to sound nice (literally, South Africa is only there for the S sound) with no unified policy or currency.
It's not the euro either. Europe ultimately is still dependent on US defence and beholden to US foreign policy.
pretty much every source in the world disagrees with the idea that China doesn't have a retirement system
https://www.cfr.org/blog/what-chinese-pension-system-and-why...
>It's just a group of randomly selected countries meant to sound nice
Source? Pretty sure BRICS is comprised of the largest regional economies that specifically aren't in the first world, that make for useful alliances for Russia & China specifically.
Africa for a long time didn't have any serious economic contenders for something like BRICS other than South Africa. Nowadays Nigeria is a closer contender on the continent. And of course you have long histories of South African politicians having spent their time in exile during Apartheid in places where they learned to call each other "comrade" even to this day in their political parties. It's not an out of the blue arrangement.
Brazil as far as I'm aware seems to be by far the most economically active in South America too?
India seems like third fiddle to Russia & China in this arrangement as a large economy in Asia.