The Belt and Road Initiative: How China Is Building a World Without the Dollar
Peter McGahan
Monday 12th May, 2025.
PART seven in my series: The Global Shift Away from the US Dollar
Few people fully understand the Belt and Road Initiative (BRI) from China. The BRI is China’s huge global development strategy, spanning more than 150 countries across Asia, Africa, Europe and Latin America. It offers roads and railways, as well as finance, supply chains, legal agreements and trade routes.
I travelled from Beijing to Kunming and studied the people, the culture and the economy and what was about to happen, and it has come to fruition.
While the West has used the dollar to punish and persuade in the past, China has been quietly laying the groundwork for a world where the dollar is no longer needed by them.
International development used to always go through Western institutions like the International Monetary Fund (IMF) and World Bank. They lent in dollars and, more often than not, ask for something in return: deregulation, privatisation, and alignment with Washington’s economic vision.
China does it differently. They offer funding in the yuan, or in the borrower’s local currency. These are arranged through state-linked institutions like the China Development Bank or Exim Bank, often with far fewer conditions.
That alone breaks the mould away from the dollar. Countries no longer have to chase or hoard dollars to fund infrastructure. They also don’t need to accept harsh policy conditions which might clash with their own development goals.
To really cement this, China has signed over 40 currency swap agreements with central banks around the world. Think of it as a mutual back-up: if a country needs yuan to repay a loan or import Chinese equipment, it can get it directly through its own central bank.
This cuts out the need for dollars altogether and shields these economies from dollar price swings or sanctions. In February 2017, in this column, I wrote: Trump V Everyone and the war with China. You can read it, as eerie as it is, online. You might also see the motivation for that war from China’s actions to be independent and
create other countries’ independence from the dollar. The late John Pilger created a movie on this very subject.
Alongside traditional lending, China is building the digital yuan, or e-CNY, which is being used in pilot projects to settle cross-border payments instantly, without going through Western banks or SWIFT.
Through mBridge (I wrote on this) a collaborative platform with countries like the UAE and Thailand, BRI-related transactions can now be settled in real time, digitally, and without touching US or SWIFT systems.
Energy is another whopper. For decades, oil and other key commodities have been priced in dollars. That’s what created the so-called petrodollar system and kept global demand for the dollar artificially high.
But now China is buying oil from Russia, Iran, and even Saudi Arabia using yuan. Copper, lithium and other raw materials linked to BRI supply chains are increasingly priced and paid for in yuan too, especially across Africa and Latin America.
Fewer countries need to stockpile dollars to trade. And slowly, the dollar’s monopoly as a trade medium begins to loosen.
When countries sign up to BRI projects, they often agree to resolve disputes under Chinese law or in Chinese courts. That’s a shift away from London, New York or Paris, where most international trade has historically been arbitrated.
This reduces the influence of Western legal norms and further isolates transactions from the dollar-centred system. If trade is invoiced in yuan, paid digitally in yuan, and resolved under Chinese law, where does the dollar fit in?
Many developing economies have grown wary of IMF and World Bank loans, which can come with austerity programmes and long-term economic pain. Dollar-denominated debt has a track record of turning into a trap.
BRI offers something different: finance without lectures, credit without political alignment, and trade without dollar exposure.
Now countries begin to see monetary sovereignty as a reachable goal. They build different. They borrow differently. They trade differently.
As BRI expands, the share of global trade settled in yuan grows. Dollar demand drops. More countries become financially self-sufficient, less exposed to Western pressure, and more invested in a multipolar system.
The dollar will not vanish. But it will no longer sit unchallenged at the centre of global finance. And the Belt and Road Initiative is one of the biggest reasons why.
If you have a question for me or if you would like a complimentary factsheet summarising this comprehensive series on dedollarisation, we can email it to you once the series has finished. Please email info@wwfp.net to be added to our list to receive the factsheet.
Peter McGahan is the Chief Executive Officer of Independent Financial Adviser Worldwide Financial Planning. Worldwide Financial Planning is authorised and regulated by the Financial Conduct Authority.
