China and BRICS+: Monetary Diplomacy in a Fragmented World
How Beijing leverages BRICS expansion to challenge dollar dominance and promote financial alternatives.
✍️ Jonathan Reyes – Macro & Geopolitics Editor
A Bigger BRICS
In 2024, the BRICS bloc — Brazil, Russia, India, China, and South Africa — expanded to include new members such as Saudi Arabia, Egypt, and the UAE, creating what analysts call “BRICS+”. The enlarged coalition now represents nearly half the world’s population and a growing share of global trade.
For Beijing, BRICS+ offers more than political symbolism. It is a platform for monetary diplomacy, a way to promote financial alternatives in a fragmented world order increasingly defined by U.S.–China rivalry.
The Dollar Question
The central issue for BRICS+ is the role of the U.S. dollar in trade and finance. Many members rely on the dollar for cross-border settlements, exposing them to sanctions and currency volatility.
China has long argued for de-dollarization, promoting its own currency — the renminbi — as an alternative. Within BRICS+, this narrative gains traction, especially among members frustrated by their vulnerability to Western financial systems.
Payment Experiments
Several pilot initiatives are underway:
- Local currency swaps between China and partners like Brazil and Russia.
- Cross-border digital payment platforms, tested within the bloc to bypass SWIFT.
- Early discussions about a BRICS settlement unit, not a new currency but a shared digital mechanism for clearing trade balances.
In some cases, these pilots involve reserve-backed digital tokens to reduce settlement times and costs. While experimental, they point to a future where multiple digital rails coexist alongside traditional banking systems.
China’s Strategic Role
As the largest economy in BRICS+, China naturally anchors these efforts. The digital yuan is being promoted as a ready-made tool for trade within the bloc. Beijing also encourages the use of its Cross-Border Interbank Payment System (CIPS) as an alternative to SWIFT.
For Chinese policymakers, success in BRICS+ would cement the country’s role as the financial hub of the Global South, building influence through infrastructure, credit, and digital payments.
Energy and Trade Ties
The inclusion of major energy exporters like Saudi Arabia and the UAE strengthens the case for non-dollar trade settlements. Pilot deals for crude oil and LNG priced in yuan have already been reported, signaling a gradual shift in global energy finance.
If expanded, this could reshape how commodities are priced and traded — weakening the dollar’s central role while boosting Beijing’s leverage.
Obstacles to Integration
Despite enthusiasm, BRICS+ faces hurdles:
- Diverging interests among members, from democratic India to authoritarian Russia.
- Currency instability, especially in weaker economies within the bloc.
- Trust deficits, as smaller states fear over-reliance on China.
A fully unified financial system remains unlikely. More plausible is a patchwork of bilateral and regional arrangements, gradually eroding dollar dominance without replacing it entirely.
The Global View
Western governments view BRICS+ monetary diplomacy with skepticism. Washington frames it as a political project to weaken the dollar, while Brussels worries about losing leverage in trade finance.
Yet many developing countries see BRICS+ as a pragmatic hedge — not a revolution, but an insurance policy against financial shocks and sanctions.
Outlook: Fragmentation or Multipolarity?
BRICS+ is unlikely to dethrone the dollar soon. But its experiments in local currency trade, digital payments, and alternative finance signal the emergence of a multipolar monetary order.For global readers, the takeaway is that the financial world is no longer binary. Between dollars, euros, digital yuan pilots, and reserve-backed tokens, a new system is taking shape — one where China and BRICS+ increasingly set the rules of engagement.
