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In this channel, I delve into the nuanced dynamics of the hegemonic diplomacy game, examining the historical tensions and current geopolitical strategies that define our world today. Join me to explore key events, policy shifts, and cultural exchanges that shape international relations, giving you a deeper understanding of the forces at play.

As we find ourselves navigating an increasingly interconnected world, the exploration of international relations becomes ever more critical. In this channel, I aim to investigate the multifaceted dynamics between the West and the East, regions rich in history, culture, and conflict. These areas not only shape the societal backdrop of their respective countries but also have a profound impact on global politics and economics. Through our discussions, I'll share insights into the historical tensions that have defined interactions between these two spheres. It's fascinating to unearth stories from history&mdash;like the Silk Road&mdash;which served as a lifeline that connected East and West long before globalization was a term we commonly used. The exchanges of culture, goods, and ideas that transpired then set the stage for the complex relationships we witness today. In addition to historical context, I will closely analyze current geopolitical strategies and policy decisions that arise from these long-standing tensions. For instance, the recent developments in trade agreements, military partnerships, and environmental initiatives highlight how these regions navigate their interests amidst ongoing competition and collaboration. You might be surprised to learn how today&rsquo;s diplomatic relations echo past events or how cultural exchanges can act as a bridge amidst political divides. Moreover, I want this channel to be a space for dialogue. I invite you to engage in discussions and share your perspectives on the issues that resonate with you. As we dive into topics like the balance of power, economic sanctions, or soft power tactics, your voice will help enrich our collective understanding. As we embark on this journey together, I am eager to explore the events shaping our world and the interactions that will define future relations. What are some aspects of the West vs. East dynamic that you are most curious about? Let&rsquo;s uncover the layers together in our upcoming conversations.

GeoPulse

US&ndash;China De-Dollarisation Tensions: An Analytical Overview Executive Summary
"De-dollarisation" describes efforts, mainly by China, to reduce reliance on the US dollar in reserves, trade settlement, and cross-border payments while building parallel financial infrastructure. For China this is chiefly defensive&mdash;hedging sanctions exposure&mdash;rather than a bid to replace the dollar outright. For the US, dollar dominance underpins cheap borrowing, sanctions leverage, and financial centrality, making erosion a strategic concern. Change is real but gradual: the dollar's reserve share fell from ~71% (2000) to ~56% (2025), while the renminbi (RMB) remains a minor reserve/payments currency, though likely undercounted due to growth in China's own clearing system, CIPS.
What "De-Dollarisation" Means Here: It covers: (1) reserve diversification into gold, euros, and other currencies; (2) trade settlement in RMB via bilateral swap lines and China's Cross-Border Interbank Payment System (CIPS); (3) reduced dependence on SWIFT/dollar-clearing infrastructure that gives Washington sanctions leverage; and (4) RMB internationalisation ambitions, including digital currency and non-dollar commodity pricing. It does not currently mean dollar displacement&mdash;rather slow, partial diversification at the margins.
Why It Is a Point of Bilateral Tension
Sanctions leverage: Dollar centrality lets Washington restrict adversaries' financial access, demonstrated against Russia after 2022. Beijing sees this as a vulnerability given Taiwan tensions and trade friction, spurring investment in sanctions-resilient payment channels.
Treasury holdings: China's US Treasury holdings fell from a 2013 peak above $1.3 trillion to roughly $650&ndash;760 billion in 2025&ndash;26, alongside sustained PBoC gold buying&mdash;diversification that analysts attribute to yield/currency management as much as strategic intent.
Technology-financial linkage: US semiconductor export controls and Chinese countermeasures (rare-earth restrictions) have bled into financial-policy debate, with both sides treating payment-system independence as part of broader strategic competition.
Divergent incentives: Washington benefits from dollar dominance and resists structural change; Beijing wants reduced sanctions exposure and monetary autonomy but is constrained by capital controls and an underdeveloped bond market, limiting RMB internationalisation absent liberalisation it is reluctant to pursue.
Bilateral Implications
Diplomatic: Features in strategic-competition framing, including US scrutiny of BRICS currency initiatives, though no formal BRICS currency exists. Trade/finance: Bilateral trade increasingly offers RMB invoicing and swap-line options, but the dollar still dominates Sino-US and most Chinese trade documentation. Sanctions/technology: CIPS direct participants grew from 139 to ~193 banks since 2024 (CFR analysis), shifting RMB messaging away from SWIFT and prompting US concern about eroding sanctions enforceability. Security spillovers: Financial-infrastructure competition intersects with Taiwan-contingency planning; discussion of a sanctions toolkit in a crisis itself incentivises Chinese hedging. Global Impacts International monetary system: IMF COFER data show the dollar's allocated reserve share at ~56.3% in 2025Q2, down from ~71% in 2000, with much recent decline attributable to exchange-rate valuation effects rather than active selling (IMF; CEPR/NBER, Goldberg and Hannaoui 2026). Trade settlement: RMB was ~3% of SWIFT-tracked global payments in mid-2025 versus ~48% for the dollar and ~24% for the euro; CFR and IMF researchers argue this understates RMB's true role since growing volumes clear directly via CIPS, outside SWIFT visibility. Capital flows/emerging markets: China has RMB swap lines with roughly 40 countries, and CIPS links participants across ~180 countries, giving emerging and Belt-and-Road partners incremental non-dollar options&mdash;evident in Russia-China trade (~90% ruble/RMB settled). Commodities/energy: Dollar invoicing remains dominant globally, though China has expanded yuan-denominated oil contracts and some Gulf/Russia energy deals partly bypass the dollar&mdash;still a small overall share. Financial stability: Fragmentation between CIPS and SWIFT/CHIPS raises longer-run concerns about transparency and illicit-finance monitoring if major economies operate on less-interoperable clearing systems, a concern flagged in BIS and IMF financial-stability work.
 Scenario Analysis (3&ndash;5 Year Horizon)
Scenario 1 &ndash; Gradual, Contained Diversification (most consistent with current trends). The dollar's reserve share continues a slow decline; RMB internationalisation advances modestly via CIPS and swap lines, but the dollar retains overwhelming dominance in reserves and invoicing. Consequence: manageable adjustment, limited disruption to US borrowing costs, a growing "shadow" RMB network mainly serving sanctions-sensitive counterparties (Russia, Iran, parts of the Global South).
Scenario 2 &ndash; Accelerated Fragmentation (higher-tension pathway). A Taiwan crisis, expanded sanctions, or tariff escalation prompts China and aligned partners to sharply accelerate RMB settlement, gold accumulation, and CIPS-first routing, while the US tightens financial and technology controls further. Consequence: faster bifurcation of payment infrastructure, higher hedging costs for emerging markets caught between systems, rising demand for gold and alternative reserves, and gradual&mdash;not sudden&mdash;erosion of dollar centrality over 5&ndash;10 years. This is a projection, not a confirmed trajectory.
Conclusion: Key Takeaways De-dollarisation is real but gradual; the dollar still dominates reserves (~56%), invoicing, and safe assets by a wide margin. China's motives are chiefly defensive (sanctions-proofing), constrained by capital controls and shallow bond markets. SWIFT metrics likely understate RMB's actual role given growing CIPS-direct settlement, complicating measurement. Financial-infrastructure tension is increasingly intertwined with technology controls and Taiwan-related security competition. The likeliest near-term path is incremental diversification, though a geopolitical shock could accelerate fragmentation.
 Sources IMF COFER: <a href="https://data.imf.org/en/datasets/IMF.STA:COFER" target="_blank" rel="noopener">https://data.imf.org/en/datasets/IMF.STA:COFER</a> IMF Blog (Oct. 2025):<a href="https://www.imf.org/en/blogs/articles/2025/10/01/dollars-share-of-reserves-held-steady-in-second-quarter-when-adjusted-for-fx-moves" target="_blank" rel="noopener"> https://www.imf.org/en/blogs/articles/2025/10/01/dollars-share-of-reserves-held-steady-in-second-quarter-when-adjusted-for-fx-moves</a> CEPR/VoxEU, Goldberg &amp; Hannaoui (2026):<a href="https://cepr.org/voxeu/columns/dollars-status-through-lens-foreign-exchange-reserves" target="_blank" rel="noopener"> https://cepr.org/voxeu/columns/dollars-status-through-lens-foreign-exchange-reserves</a> US Treasury TIC, Major Foreign Holders: <a href="https://ticdata.treasury.gov/resource-center/data-chart-center/tic/Documents/slt_table5.html" target="_blank" rel="noopener">https://ticdata.treasury.gov/resource-center/data-chart-center/tic/Documents/slt_table5.html</a> CRS, Foreign Holdings of Federal Debt (2026):<a href="https://www.congress.gov/crs-product/RS22331" target="_blank" rel="noopener"> https://www.congress.gov/crs-product/RS22331</a> CFR, "How Cross-Border Chinese RMB Flows May Weaken U.S. Sanctions": <a href="https://www.cfr.org/articles/how-cross-border-chinese-rmb-flows-may-weaken-u-s-sanctions" target="_blank" rel="noopener">https://www.cfr.org/articles/how-cross-border-chinese-rmb-flows-may-weaken-u-s-sanctions</a> CFR, "Finding China in the U.S. TIC Data":<a href="https://www.cfr.org/articles/finding-china-and-the-u-s-tic-data" target="_blank" rel="noopener"> https://www.cfr.org/articles/finding-china-and-the-u-s-tic-data</a> CSIS, "Sanctions, SWIFT, and China's CIPS":<a href="https://www.csis.org/analysis/sanctions-swift-and-chinas-cross-border-interbank-payments-system" target="_blank" rel="noopener"> https://www.csis.org/analysis/sanctions-swift-and-chinas-cross-border-interbank-payments-system</a> Atlantic Council, Euro/RMB payments share: <a href="https://www.atlanticcouncil.org/blogs/econographics/the-euros-share-of-international-transactions-is-likely-smaller-than-it-looks/" target="_blank" rel="noopener">https://www.atlanticcouncil.org/blogs/econographics/the-euros-share-of-international-transactions-is-likely-smaller-than-it-looks/</a> CIPS overview (PBoC data via Wikipedia):<a href="https://en.wikipedia.org/wiki/Cross-Border_Interbank_Payment_System" target="_blank" rel="noopener"> https://en.wikipedia.org/wiki/Cross-Border_Interbank_Payment_System</a> IMF WP, RMB Usage in Cross-Border Payments: <a href="https://www.imf.org/-/media/Files/Publications/WP/2023/English/wpiea2023077-print-pdf.ashx" target="_blank" rel="noopener">https://www.imf.org/-/media/Files/Publications/WP/2023/English/wpiea2023077-print-pdf.ashx</a>

China's Rare Earth and Semiconductor Leverage: A Strategic Rundown
Over the past three years, Beijing has increasingly used its dominance over rare earth minerals and key links in the semiconductor supply chain as instruments of trade and technology policy, prompting reciprocal U.S. export controls and a scramble by Washington and its allies to diversify supply. The result is a fast-evolving standoff with real, measurable effects on prices, availability, and industrial planning worldwide.
Background: Where China's Leverage Comes From
China accounts for roughly 90% of global rare earth refining capacity and mines over 60% of raw rare earths, while manufacturing around 90% of high-performance rare-earth magnets used in motors, wind turbines, and weapons systems [Payne Institute]. It also supplies about 98% of primary gallium and 91% of primary germanium, materials used in semiconductors, fiber optics, and military-grade electronics [UNU/MERIT]. On the chip side, China is not a leading producer of the most advanced logic chips, but it holds a strong position in mature-node manufacturing, rare-earth-dependent components (magnets, sputtering targets), and materials such as gallium arsenide substrates that feed into global semiconductor supply chains.
Policy Tools: Licensing, Quotas, and Blacklists
China's primary lever has been export licensing rather than outright bans, though both have been used:
July 2023: China required licenses for exporting gallium- and germanium-related items, the first major use of this specific tool against chip-adjacent materials.
August 2023: Antimony export limits followed; Chinese antimony exports subsequently fell by roughly 97%, and global antimony trioxide prices approximately doubled.
December 2024: China moved from licensing to an outright ban on exporting gallium, germanium, antimony, and superhard materials specifically to the United States, explicitly linked to expanded U.S. controls on chipmaking equipment and high-bandwidth memory.
April 2025: Beijing introduced licensing requirements for seven medium and heavy rare earths &mdash; including terbium, dysprosium, samarium, gadolinium, and yttrium &mdash; used in high-temperature magnets for defense and clean-energy applications.
October 9, 2025: China issued its most sweeping measures to date, modeled on the U.S. "foreign direct product rule." Announcements 61 and 62 require licenses for exporting rare-earth-related technology (mining, processing, magnet manufacturing) and, for the first time, assert extraterritorial jurisdiction &mdash; requiring licenses even for shipments between two non-Chinese countries if they contain Chinese-origin rare earth content above a 0.1% value threshold. Related measures also touched semiconductors, lithium batteries, and graphite anode materials. China has described these steps as protecting materials with "dual military and civilian uses", while U.S. and allied officials have characterized them as retaliation for American semiconductor restrictions and, more broadly, industrial policy meant to preserve Chinese leverage over downstream manufacturing.
On the U.S. side, the primary tools have been the Bureau of Industry and Security's (BIS) Entity List, the Foreign Direct Product Rule (FDPR), and end-use controls. Since October 2022, the U.S. has restricted exports of advanced chips, chipmaking equipment, and related software to China, expanding the FDPR in 2024 to cover semiconductor manufacturing equipment and adding roughly 140 Chinese entities to the Entity List that year alone [Congressional Research Service; Edge AI and Vision Alliance]. A short-lived "AI Diffusion Rule" imposing worldwide licensing tiers was issued in January 2025 and later rescinded by the Trump administration in favor of chip-specific restrictions.
Recent Impacts on the U.S. and Global Markets The practical effects have been uneven but tangible:
Price and supply disruption: Chinese customs data cited in industry reporting show exports of yttrium, dysprosium, and terbium running roughly 50% below pre-restriction baselines as of mid-2026, with no fixed timetable for normalization [Tech Times]. The U.S. Geological Survey estimated in October 2024 that a full gallium-germanium export ban could cost the U.S. economy $3.4 billion in GDP.
Compliance burden: The "one batch, one license" system introduced in April 2025 created significant paperwork backlogs, forcing manufacturers in autos, defense, and life sciences to document end-use and facility details for each shipment.
Diplomatic De-escalation: Following an October 2025 Trump&ndash;Xi summit in Busan and a subsequent meeting in Beijing, China suspended the October 2025 expansion for one year via MOFCOM Announcements No. 70 and No. 72, and began issuing general licenses to approved exporters in December 2025. However, the underlying April 2025 licensing regime for seven heavy rare earths remains in force, and defense/aerospace end-uses remain excluded from relief.
Chip market volatility: U.S. policy toward China has itself fluctuated &mdash; Nvidia's H20 chip was effectively blocked from Chinese sales in April 2025, then approved for licensed export in July 2025 after commercial and diplomatic negotiation, illustrating how export control enforcement has become a variable in bilateral trade talks rather than a fixed policy.
Responses: Diversification, Stockpiling, and Reshoring Washington and allied governments have pursued several parallel strategies:
Direct government investment: In July 2025, the Department of Defense agreed to invest $400 million in MP Materials &mdash; the operator of the only active U.S. rare earth mine, at Mountain Pass, California &mdash; making the Pentagon the company's largest shareholder with roughly a 15% stake, alongside a $150 million loan and a 10-year, 7,000-metric-ton annual magnet purchase commitment.
Allied supply chains: MP Materials and the Pentagon subsequently agreed to a joint venture with Saudi Arabia's Maaden to build rare-earth refining capacity outside China, with MP/DoD holding a 49% stake.
Stockpiling and equity stakes elsewhere: U.S. officials, including Interior Secretary Doug Burgum, have signaled interest in expanding critical mineral stockpiles and taking direct equity positions in other mining companies, modeled on the MP Materials deal.
Export control tightening and easing in tandem: The U.S. has continued adding Chinese entities to the BIS Entity List (65 additions reported in 2025) while periodically relaxing specific chip restrictions as part of broader trade negotiations, reflecting competing priorities between national security agencies and commercial/diplomatic interests.
 Conclusion
China's use of rare earth and semiconductor-adjacent export controls has shifted from case-by-case licensing to a broader, at times extraterritorial, regulatory architecture, while the United States has responded with its own export restrictions, entity blacklisting, and &mdash; more recently &mdash; direct public investment in domestic mining and processing. Both governments have shown willingness to escalate and then partially de-escalate these measures around high-level diplomatic meetings, suggesting the tools are being used as much for negotiating leverage as for fixed strategic denial. Given the multi-year timelines required to build alternative mining, refining, and magnet-manufacturing capacity, analysts generally expect China's structural dominance in rare earth processing to persist into the late 2020s even as diversification efforts proceed.
Sources
Andersen Institute, <a href="&quot;China's%20Export%20Control%20Architecture&quot;%20&mdash;%20anderseninstitute.org" target="_blank" rel="noopener">"China's Export Control Architecture" &mdash; anderseninstitute.org</a> AP via 2news.com,<a href="&quot;China%20bans%20exports%20to%20US%20of%20gallium,%20germanium,%20antimony&quot;%20&mdash;%202news.com" target="_blank" rel="noopener"> "China bans exports to US of gallium, germanium, antimony" &mdash; 2news.com</a> East Asia Forum, <a href="&quot;China%20leverages%20paperwork%20to%20ration%20rare%20earths&quot;%20&mdash;%20eastasiaforum.org" target="_blank" rel="noopener">"China leverages paperwork to ration rare earths" &mdash; eastasiaforum.org</a> Tech Times, <a href="&quot;China%20Rare%20Earth%20Export%20Controls:%20April%20Curbs%20Still%20Bite&quot;%20&mdash;%20techtimes.com" target="_blank" rel="noopener">"China Rare Earth Export Controls: April Curbs Still Bite" &mdash; techtimes.com</a> White &amp; Case, <a href="&quot;China%20imposes%20extraterritorial%20jurisdiction...%20export%20controls%20on%20rare%20earth&quot;%20&mdash;%20whitecase.com" target="_blank" rel="noopener">"China imposes extraterritorial jurisdiction... export controls on rare earth" &mdash; whitecase.com</a>

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