Xing Wenzeng: Financial Hegemony and Its Influence from the Perspective of Lenin's Theory of Imperialism
Since early 2022, the Federal Reserve's continuous interest rate hikes and the sanctions imposed on Russia by the U.S. and the West have triggered severe turbulence in international financial markets, bringing new challenges to global economic stability and international order. The currencies of many countries have depreciated sharply; some developing nations have faced issues such as capital outflow, rising debt servicing costs, and intensified imported inflation, with some even falling into currency or debt crises. This has further heightened public awareness of the profound impact of rampant financial hegemony. How has financial hegemony become a sharp tool for plundering global wealth? What deep-seated effects will it produce? These questions require us not only to understand financial hegemony itself but also to explore its root causes within Lenin’s theory of imperialism.
I. The Institutional, Military, and Technological Foundations of Contemporary Financial Hegemony
Financial hegemony refers to a hegemonic state utilizing its dominant and superior position in the international monetary system to impose its own principles or rules throughout the entire system, thereby extracting hegemonic profits. Historically, countries such as Britain exercised financial hegemony prior to World War I, but their influence and capacity to plunder wealth were incomparable to the financial hegemony seen after World War II. The reason for this, in addition to formidable military and technological strength, is fundamentally linked to the formation of financial capital and financial oligarchs as proposed in Lenin’s theory of imperialism.
(1) The rule of financial capital grants hegemonic status to states possessing financial "strength"
As capitalism developed from the stage of free competition to the monopoly stage, the ties between banking capital and industrial capital grew increasingly close, merging in the pursuit of profit to become financial capital. Compared to other forms of capital, financial capital possesses incomparable advantages. Domestically, financial capital controls the majority of national funds through means such as "participation systems" [1], allowing the tentacles of monopoly capital to reach into every corner. Internationally, through capital export, the financial blocs of imperialist countries utilize their monopoly advantages to seize global wealth; a tiny minority of imperialist states rely on "clipping coupons" [2] and other methods to extract wealth from the world. Regarding the role of financial capital in plundering wealth, Lenin described in Imperialism, the Highest Stage of Capitalism: "Financial capital, concentrated in a few hands and exercising a virtual monopoly, exacts enormous and ever-increasing profits from the floating of companies, issue of stock, state loans, etc., tightening the grip of the financial oligarchies and levying tribute upon the whole of society for the benefit of monopolists."
The development of financial capital catered to the needs of monopoly capital. For industrial capital, self-expansion [3] must be realized through the production process and the conversion between value and use-value. Financial capital, however, not only controls more industrial capital through the fusion of banking and industrial capital but also creates income through speculative trading assets—namely financial securities—thereby pushing the general characteristics of capitalism to their extreme. This characteristic is "the detachment of the ownership of capital from the application of capital to production, that of money capital from industrial or productive capital, and that of the rentier [4] who lives entirely on income obtained from money capital, from the entrepreneur and from all who are directly concerned in the management of capital." This characteristic of financial capital allows it to break through the limits of industrial capital’s expansion, enabling financial oligarchs to realize the extraction of profit to a greater extent. The incomparable advantage that financial capital holds over other forms of capital means that in the imperialist stage, financial capital begins to occupy a dominant position. On an international scale, through capital export, financial capital becomes "a tremendous power, one might say the determining power, in all economic and international relations, which can subordinate, and actually does subordinate, to itself even states enjoying the fullest political independence." Consequently, the rule of financial capital implies that a few countries possessing financial "strength" occupy a special position distinct from all others. It is precisely this special position and power that grants these countries financial hegemony.
(2) The development and intensification of financial hegemony after World War II
After World War II, the development of monopolies—particularly financial monopolies—constituted the institutional foundation of U.S. financial hegemony. Meanwhile, the development of U.S. military and technological power allowed financial hegemony to be consolidated.
First, the development of financial monopoly allowed financial hegemony to be intensified. After World War II, and especially after the 1970s, the scale of financial capital expanded daily, becoming the primary form of monopoly capital. Massive financial conglomerates not only deepened their control over industrial capital but also accumulated a more substantial foundation for external expansion and plunder. For instance, the Rockefeller consortium in the United States, through its control of over a hundred financial institutions including Chase Manhattan Bank, Chemical Bank of New York, Metropolitan Life Insurance, and Equitable Life Insurance, directly or indirectly controlled many industrial and mining enterprises—including ExxonMobil, ChevronTexaco, BP, Boeing, and Westinghouse—realizing the control of industrial capital by financial capital. The profits of financial firms also rose rapidly; the ratio of total profits of U.S. financial firms to total domestic profits rose from 13.76% in 1967 to 28.81% in 2017, while the share of manufacturing profits fell from 52.15% to 22.5% during the same period. Supported by powerful capital, the tentacles of financial hegemony radiated from the domestic sphere to various international fields.
Second, formidable U.S. military power provided support for financial hegemony. For a financial hegemon to forcibly implement its rules throughout the entire system, it cannot do without the support of powerful military strength. After the end of World War II, the United States began to strengthen its global military deployment, with its military reach spanning the globe. Currently, it possesses approximately 750 military bases in at least 80 countries, and among the 193 member states of the United Nations, U.S. military personnel are stationed in about 175 countries. Formidable military power both consolidated the U.S. hegemonic position and maintained financial hegemony. For example, the United States promised security guarantees to Saudi Arabia and other Arab oil-producing nations on the condition that the U.S. dollar must be used as the currency for oil transactions. Furthermore, supported by powerful military strength, the U.S. frequently uses various pretexts—such as executing UN resolutions, maintaining peace, providing humanitarian aid, opposing aggression, and protecting the lives and property of U.S. citizens—to conduct military interventions in other countries and launch local wars. This not only signifies massive profits for the military industry and huge orders during the post-war reconstruction process but also implies massive capital inflows into the United States, achieving the objectives of stimulating the domestic economy and maintaining financial hegemony. For instance, the invasion of Iraq caused the net inflow of U.S. financial capital to surge from $54.2 billion in the fourth quarter of 2002 to $86.6 billion in the first quarter of 2003; after the war ended, Iraqi oil exports also reverted from Euro to US Dollar settlement. Similarly, after the start of the war in Afghanistan, the Dow Jones Industrial Average rebounded rapidly, rising by more than 600 points in a single day as a large volume of dollars flowed back into the United States.
Third, technological monopoly and financial hegemony are combined, relying on each other. As early as World War II, the United States continuously increased military R&D expenditures. By the end of the war, the U.S. had achieved global leadership in science and technology, subsequently maintaining its technological monopoly advantage by achieving revolutionary transformations in high-tech fields. For a long time, the U.S. has maintained its status as a technological overlord by controlling key technologies, implementing export controls, and setting restrictions on technical transactions to strike competitors from the supply side to the demand side. This allows it to acquire massive wealth and provides financial hegemony with a more substantial economic foundation. In recent years, the U.S. has adopted a "small yard, high fence" [5] strategy, constructing so-called "technology alliances" based on "shared values" to seize dominance in global technological competition. Building on this technological monopoly, it uses capital export to allow U.S. financial capital to penetrate major global technology companies. For example, leading semiconductor enterprises such as TSMC (Taiwan, China), Samsung Group (South Korea), and ASML (Netherlands) all have significant U.S. equity participation; nearly 50% of the equity in TSMC and ASML belongs to U.S. capital. Using financial capital to control the lifelines of relevant enterprises and force them to comply with U.S. strategic arrangements has become an important means of maintaining hegemony. For instance, a major factor in TSMC building factories in the U.S. is its high dependence on the U.S. financial market to support its capital and R&D expenses.
II. Financial Hegemony as a Vital Weapon for Global Control and Plunder by the U.S. and the West
Rooted in the global rule of monopoly capital, particularly financial capital, financial hegemony has increasingly become an important weapon for the U.S. and the West to achieve their economic and political ends. They not only use it to seize global wealth, bringing more developing countries into their territory of plunder to further expand the scope of financial capital’s rule, but also utilize financial hegemony to realize interference in and control of other countries.
(1) Combining financial hegemony with geopolitical objectives
In the era of traditional colonial imperialism, "the typical form of state was not only two groups of countries, the coloni-possessing countries and the colonies, but also various forms of dependent countries which, politically, are formally independent, but in fact, are enmeshed in the net of financial and diplomatic dependence." Today, developed capitalist countries more often achieve this control and containment through economic means, with financial hegemony being one of the most important instruments.
Under the current international monetary system, the formulation and execution of financial rules, order, and instruments are decided by financial hegemons such as the U.S. and the West. This not only gives these countries a sharp tool for occupying and divesting other nations of wealth through financial rules but also allows them to combine financial hegemony with geopolitical goals to achieve political ends via economic means. In the current Russia-Ukraine conflict, we can clearly see that the financial sanctions imposed on Russia by the U.S. and the West are a manifestation of this financial hegemony.
In fact, achieving geopolitical goals through financial sanctions has long been a key method for the U.S. and the West. In this process, the banking system and the payment and clearing system are vital channels for executing financial sanctions. For example, since 1950, to contain North Korea’s development, the U.S. and the West have implemented multiple rounds of financial sanctions. As early as 1950, President Harry S. Truman announced comprehensive sanctions against North Korea, including the freezing of North Korean assets in the United States. Following this, the U.S. launched several more rounds of sanctions; for instance, in August 2009, under Executive Order 13382 (targeting proliferators of weapons of mass destruction and their supporters), the U.S. imposed financial sanctions on North Korea’s Kwangson Banking Corp, freezing its accounts and financial assets in the U.S. Furthermore, the U.S. and the West have implemented numerous financial sanctions against the Soviet Union, China, Iran, and many other countries.
Since the outbreak of the Russia-Ukraine conflict in 2022, the U.S. and the West have utilized financial hegemony to implement several sanction measures against Russia to contain it. Specifically, these include: (1) Freezing assets by placing major Russian financial institutions on the SDN [6] list. In February 2022, the U.S. Treasury’s Office of Foreign Assets Control (OFAC) placed several financial institutions, including Vnesheconombank (VEB) and VTB Bank, on the SDN list, freezing their U.S. assets and prohibiting transactions. The EU and other Western countries took similar measures. (2) Removing certain Russian banks, such as VTB, VEB, and Promsvyazbank, from the SWIFT system. This move has been dubbed a "financial nuclear bomb" dropped on Russia. (3) Freezing nearly $300 billion of the Russian Central Bank’s foreign exchange reserves. Impacted by these financial sanctions, Russia’s financial order suffered a massive shock, and financial markets experienced severe chaos in early March 2022. Russian financial assets were maliciously rated, downgraded, and sold off; its sovereign debt was reduced to "junk" status by credit rating agencies, and the stock prices of Russian enterprises in U.S. and European capital markets plummeted.
(2) Relying on the Dollar Hegemony to plunder global wealth
The most important contemporary manifestation of financial hegemony is the hegemony of the U.S. dollar. In the latter stages of World War II, the establishment of the Bretton Woods system ensured the dollar’s status as the global hard currency. After the collapse of the Bretton Woods system, the U.S. established the "Petrodollar" system, ensuring the dollar's hegemonic position continued. Supported by dollar hegemony, the U.S. dollar occupies an incomparable position in the international monetary system, allowing the United States not only to collect seigniorage [7] but also to trigger economic fluctuations and turbulence in other countries through the appreciation or depreciation of the currency, thereby realizing the plunder of global wealth and securing the dominant position of the U.S. economy.
Historically, the Federal Reserve has repeatedly fluctuated between "opening the floodgates" and "closing the valves" based on the needs of American interests, utilizing currency volatility to extract economic benefits from other nations. When U.S. monetary policy is in an expansionary cycle, massive amounts of capital flow globally, boosting asset price bubbles and earning high value-added returns. When U.S. monetary policy enters a contractionary cycle, capital flows back to the United States, leaving other countries to bear the bitter fruits of sharp local currency devaluation and collapsing asset prices. For example, after the 2008 international financial crisis, the U.S. implemented consecutive rounds of quantitative easing (QE) to stimulate its economy. Under this measure, it not only reduced the price of imported goods through the depreciation of the dollar but also caused a massive influx of hot money into emerging nations. According to an emerging markets capital flows report released by the Institute of International Finance on January 22, 2013, the scale of net private capital inflows into emerging markets remained above one trillion dollars for three consecutive years starting in 2010. The massive influx of international capital caused investment volumes in these countries to rise significantly. However, as the Federal Reserve halted its quantitative easing policy, this capital—having secured massive profits—began to flow back, resulting in consequences such as local currency devaluation and investment contraction for emerging economies.
In 2022, the United States encountered its most severe inflation in 40 years, with the Consumer Price Index (CPI) year-on-year increase reaching 9.1% in June. To curb inflation, the Federal Reserve began a cycle of aggressive interest rate hikes in March 2022. Under this policy, the dollar trended strong while the currencies of other countries depreciated sharply. The Euro’s exchange rate against the dollar fell below parity for the first time since December 2002; the Yen hit a 24-year low against the dollar; and the currencies of the vast number of developing countries depreciated even more drastically. Intense short-term fluctuations in exchange rates created space for international financial capital to engage in speculation; the currencies of many countries were shorted by international capital, leading to chaos in the financial order. Even more serious for the vast number of emerging economies and developing countries was that the dollar's appreciation led to a further deterioration of their external financing environments, exacerbated the burden of debt interest, and continuously increased debt-servicing costs. Many countries became unable to repay their debts and fell into debt crises. For instance, Sri Lanka declared government bankruptcy in July 2022, finding itself not only unable to repay foreign debt as high as 51 billion dollars, but also facing multiple domestic crises including shortages of goods and skyrocketing prices. In light of this situation, the World Bank issued a warning stating that as financial conditions tighten and the dollar appreciates, 25% of emerging markets are at or near debt distress, and over 60% of low-income countries face debt distress. Michael Hudson, an economics professor at the University of Missouri-Kansas City, also pointed out that Third World countries are facing domestic debt deflation and cannot repay dollar-denominated debts without devaluing their own currencies. International raw materials are priced in dollars, which means that when the dollar appreciates, countries using their local currencies must pay more of those currencies to purchase copper, oil, food, or other raw materials.
(3) Utilizing financial hegemony to pave the way for capital expansion and economic control
During the period of free-competition capitalism, industrial capital primarily sought high profits by expanding sales markets and acquiring raw materials. In the stage of imperialism, however, driven by financial hegemony, the role of financial capital in throwing other countries into chaos can also enable the hegemonic power to achieve capital expansion and economic control over other nations, thereby extracting enormous profits. Consequently, some scholars have pointed out that U.S. foreign policy increasingly adopts the creation of "controlled chaos" as a strategic objective.
International financial instability resulting from financial hegemony strikes at the financial order of many nations, plunging their economies into hardship and thus paving the way for the hegemonic power to control the industries and other sectors of these countries. For example, after the outbreak of the Asian financial crisis, South Korea was forced to accept a bailout package from the International Monetary Fund (IMF) to avoid domestic economic collapse. According to this agreement, South Korea had to implement structural reforms, open its financial markets, and relax restrictions on foreign capital. The upper limit for foreign equity holdings in South Korea was raised from 26% to 50%, and the limit for individual holdings from 7% to 50%. These conditions opened the floodgates for foreign capital to enter the Korean market; enterprises that were in distress at the time, such as Hyundai Motor and Daewoo Group, became targets for Western financial capital. Under the impact of the financial crisis, the proportion of foreign investors in the common stock of Samsung Group reached 55%, consisting primarily of American financial syndicates. In Latin America, international capital has also used the opportunity of debt crises to become the de facto controllers of Latin American economic development through "aid" mechanisms.
III. Financial Hegemony Exacerbates the Deep-Seated Contradictions of Capitalism
While the rampancy of financial hegemony brings immense benefits to international monopoly capital, it also affects the relations between developed countries as well as their relations with developing countries, exacerbating the deep-seated contradictions of capitalism.
(1) The deepening of contradictions and conflicts among developed capitalist countries
The uneven economic and political development of capitalism is an absolute law. In Imperialism, the Highest Stage of Capitalism, Lenin verified through empirical analysis of countries like Britain, Japan, and Russia that "under capitalism it is impossible for the development of individual enterprises, trusts, branches of industry, or countries to be even," and that "financial capital and the trusts do not diminish but increase the differences in the rate of growth of the various parts of the world economy." As the era progresses, this imbalance has not disappeared; rather, it has accelerated with the rapid daily changes in new technology and the advancement of economic globalization. For example, the development of Japan and Europe after World War II posed a challenge to the status of the United States. In this context, financial hegemony has been employed as a vital economic tool to maintain American superiority, becoming a key instrument for neutralizing uneven economic development.
In the current monetary system, changes in the dollar’s exchange rate exert a major influence on the economies of all nations, which is precisely one of the objectives of the Federal Reserve’s policy adjustments. Historically, we can see that the Federal Reserve has adjusted monetary policy on numerous occasions to achieve goals such as curbing the rapid growth momentum of other nations and maintaining U.S. hegemonic status. For instance, in the 1980s, to improve the U.S. balance of payments deficit, the "Plaza Accord" forced a significant appreciation of the Yen against the Dollar, leading to a massive setback for Japanese exports. This became a major catalyst for the Japanese economy falling into long-term stagnation. After the birth of the Euro, the unified European currency formed a challenge to dollar hegemony; the United States caused a massive flight of international capital from Europe by instigating the Kosovo War, causing the Euro-to-Dollar exchange rate to slide continuously. Following the outbreak of the 2008 international financial crisis, the Federal Reserve likewise used quantitative easing to over-issue dollars, achieving the purpose of shifting the crisis [onto others].
Since 2022, the Federal Reserve’s continuous interest rate hikes may appear on the surface to be for curbing domestic inflation, but viewed from their results, developed country currencies such as the Euro and Yen have depreciated significantly. Not only have their economies been seriously affected, but the international status of the Euro and other currencies has been weakened, while the hegemonic status of the dollar has been consolidated. Following multiple rounds of Fed rate hikes, the Euro and other currencies have demonstrated their vulnerability within the current monetary system, and their challenge to dollar hegemony has been greatly weakened. Japan, meanwhile, has suffered a sharp increase in the import costs of raw materials such as energy due to significant currency depreciation, leading to slowed economic growth or even negative growth.
Arrogant dollar hegemony and the severe consequences it triggers will inevitably provoke resentment from developed capitalist countries like Japan and Europe, causing undercurrents of contradiction to stir and conflicts to deepen among developed capitalist nations. In fact, in recent years, as the strength of the European Union has grown daily, the Euro has already formed a major challenge to the Dollar, and the EU is actively promoting the internationalization of the Euro. In January 2021, the European Commission released a strategic document aimed at strengthening the international status of the Euro and the construction of the European financial system, hoping to use this to counter dollar hegemony and unilateral extraterritorial U.S. sanctions. During the EU Leaders’ Summit in October 2021, French President Emmanuel Macron also publicly stated that as the Euro is a vital policy tool, the EU should further promote its internationalization to protect European enterprises from the "long-arm jurisdiction" imposed by the United States through the dollar and American-style standards. It is foreseeable that as the economies of Japan and Europe recover and develop, the contradictions between the United States, Europe, and Japan will further deepen.
(2) The further intensification of contradictions between the hegemonic power and developing countries
Through empirical research, Lenin analyzed the parasitic and decadent nature of imperialism under the rule of financial capital, pointing out that the whole world "is divided into a handful of usurer states and a vast majority of debtor states." Today, under the impact of financial hegemony on the international financial order, the vast number of developing countries remain the most severely damaged, and their economies easily fall into turmoil and crisis. For example, in the 1980s, the Federal Reserve’s continuous rate hikes and the rising dollar caused repayment costs for Latin American countries to increase sharply, leaving them deeply mired in debt crises. The Asian financial crisis that broke out in 1997 was also significantly linked to the malicious shorting of emerging Asian currencies by Wall Street financial institutions. The international financial instability triggered by the Federal Reserve’s rate hikes since 2022 has forced developing countries to face not only domestic inflation, capital flight, and increased foreign debt costs but also a continuous decline in exports.
According to World Trade Organization statistics, 86% of global trade was conducted in U.S. dollars in 2022. Therefore, for the United States, which possesses financial hegemony, a strong dollar allows it to acquire the goods and services of other countries at a lower cost and helps to reduce U.S. inflation rates. However, for the vast number of developing countries, it leads to rising import prices for goods and a surge in foreign debt. For instance, under the influence of the strong dollar, the Egyptian Pound depreciated by more than 50% in 2022, causing debt-servicing costs to rise sharply. The Egyptian government predicted that its foreign debt would account for 93% of GDP by the end of the fiscal year in June 2023, with debt interest payments consuming over 45% of the country’s revenue.
Furthermore, Federal Reserve rate hikes have led to a "dollar reflux," dealing a massive blow to the economies of developing countries. In Egypt, more than 23 billion dollars in hot money has flowed out since March 2022 due to the strong dollar. In Vietnam, a portion of foreign capital began withdrawing from the Vietnamese stock market in the second half of 2022; statistics show the total amount of foreign capital withdrawn from Vietnam has reached 859 trillion Vietnamese Dong. Meanwhile, due to high inflation in Europe and the rapid decline in consumer purchasing power, the volume of export orders received by Vietnam in 2022 dropped precipitously. According to a survey by the Vietnam General Confederation of Labour, a total of 441 enterprises and more than 620,000 employees were affected.
The conditions in Egypt and Vietnam are microcosms of many developing countries. On September 18, 2022, the mainstream U.S. media outlet The Wall Street Journal published a report titled "A Strong Dollar Is Creating Trouble for the Global Economy." On October 3, 2022, the Financial Times website published an article by Ruchir Sharma, Chairman of Rockefeller International, titled "Biden should do something about the dollar." The article pointed out that the continuous global strengthening of the dollar has exacerbated pressure on global financial markets. Scholars from many developing countries have more directly condemned the consequences triggered by dollar hegemony. Kenyan think-tank scholars pointed out that the Federal Reserve’s aggressive interest rate hikes will exacerbate the challenges faced by developing countries and further weaken the prospects for economic recovery on the African continent. Mexican scholars also stated that U.S. influence in the international financial system and dollar hegemony serve only its own national interests. The United States formulates monetary policy in total disregard of the interests of other nations, which is a typical manifestation of unilateralism. The Federal Reserve's continuous rate hikes will bring adverse effects to the economic development of Latin America and the world.
IV. Building a More Just and Rational International Order is Imperative
Based on the shocks brought about by financial hegemony, the dollar-dominated international financial system is increasingly losing the trust of the international community. Europe, Asia, and the Middle East are exploring paths toward "de-dollarization," striving to change the irrational international financial system and international order. To reduce the damage of Western sanctions on its own economy, Russia took the lead in announcing the promotion of "de-dollarization." The Central Bank of Russia has continuously reduced the share of the dollar in its international reserves, and since April 2022, it has shifted to using the Ruble for settlements when supplying natural gas to "unfriendly" countries and regions.
The financial sanctions imposed on Russia by the West since the outbreak of the Russia-Ukraine conflict have also sounded an alarm for other nations. The "weaponization of currency" has not only eroded the dominant position of the U.S. dollar and triggered a global financial credit crisis, but has also made more countries recognize how the unilateral freezing of foreign assets by the United States and Europe undermines international rules, thereby shaking the existing international monetary and global financial systems. Under these circumstances, many countries have accelerated their "de-dollarization" processes. For instance, the Reserve Bank of India has established a Rupee settlement mechanism for international trade, and the Bank of Israel began incorporating the Canadian dollar, Australian dollar, Japanese yen, and Renminbi (RMB) into its foreign exchange reserves in 2022, while further reducing the proportion of U.S. dollars. Many countries, including China, have further optimized the structure of their foreign exchange reserves by reducing the weight of the dollar. According to statistics, Japan and China—the world’s two largest holders of U.S. Treasury bonds—reduced their holdings by $224.5 billion and $173.2 billion respectively in 2022. Several other countries, including France, Saudi Arabia, and Israel, have also sold off large quantities of U.S. Treasuries since 2022.
The removal of Russia from the SWIFT system will also stimulate the development of other regional currency settlement systems, further weakening the international monopoly of the U.S. dollar. To prevent the West from cutting off the link between its banks and the SWIFT system, Russia began establishing the System for Transfer of Financial Messages (SPFS) as early as 2018 as a domestic alternative to SWIFT. In February 2023, the Central Bank of Russia announced that SPFS had 469 participating institutions, including 115 foreign entities from 14 countries. China will also further promote the internationalization of the RMB. These developments will trigger a fission in the global financial payment system. As Raghuram Rajan, former Governor of the Reserve Bank of India, pointed out: "After the freezing of the Russian Central Bank's reserves, China, India, and many other countries will worry about their own foreign exchange reserves." This will compel many countries to build their own payment systems as alternatives to SWIFT, leading to a fragmentation of the global payment architecture.
The exploration of "de-dollarization" not only indicates the desire of many nations to reduce their reliance on the dollar but also demonstrates that the reform of the international financial system is imperative. Constructing a rational multilateral international financial system and international economic order, and practicing genuine multilateralism, is the correct path to counter financial hegemony. As Columbia University Professor Jeffrey D. Sachs noted, "We must improve international cooperation and establish a reliable multilateral system to deal with the instability, uncertainty, and fragility in international financial markets." At the same time, "de-dollarization" and the progress of RMB internationalization reflect the evolution of the international landscape behind the changes in the international financial system. Not only is dollar hegemony being increasingly eroded, but the superior position of the United States within the international landscape is also facing growing challenges. Advancing the multipolarization of the international landscape is not only a financial requirement for all countries but also a call for a just and reasonable international economic and political order.
As a member of the developing world, China has consistently worked to change the irrational international monetary system. To counter dollar hegemony, China has been calling for the diversification of international settlement currencies, remains committed to increasing the weight and representation of developing countries in international financial institutions, and promotes the construction of a just and reasonable international financial system. In sharp contrast to the pursuit of financial hegemony and the plunder of global wealth by the United States and its allies, China remains committed to building a community with a shared future for humanity and promoting win-win cooperation for all mankind. "Building a community with a shared future for humanity is the future for people of all countries. Only when all nations pursue the Great Way [13], coexist in harmony, and engage in win-win cooperation can prosperity be lasting and security be guaranteed." In the face of the volatility in international financial markets in 2022, Xi Jinping delivered a speech during the first stage of the 17th G20 Summit on November 15, 2022, emphasizing the need to "curb global inflation and resolve systemic economic and financial risks. In particular, developed economies should reduce the negative spillover effects of monetary policy adjustments and stabilize debt at sustainable levels. International financial institutions and commercial creditors, as the primary creditors of developing countries, should participate in debt relief actions for developing nations." China has "comprehensively implemented the G20 Debt Service Suspension Initiative (DSSI), with the largest total amount of debt suspension among G20 members, and has participated in debt treatment under the 'Common Framework for Debt Treatment beyond the DSSI' alongside relevant members, providing support for relevant developing countries to overcome their difficulties."
Against the backdrop of dollar hegemony continuously striking the international financial market and international economic order, the trend of "de-dollarization" is "clearly irreversible." Amidst the increasing rampancy of financial hegemony, the will of oppressed developing countries for unity and cooperation will become even stronger as they work together toward the ultimate realization of a fairer and brighter future.
(Author: Xing Wenzeng, Associate Researcher at the Institute of Marxism Studies, Chinese Academy of Social Sciences) Online Editor: Tong Xin Source: World Socialism Studies, No. 8, 2023