FX.co ★ China focuses on green energy to boost yuan's standing in commodity markets

Chinese authorities are confident that the use of renewable energy will help strengthen the national currency, according to Business Insider.

China's shift to green energy has the potential to boost the yuan, which is currently being actively used in major commodity markets. The transition to renewable energy sources will help the country boost the yuan's appeal and raise its global market standing, the government believes.

The yuan exchange rate is of strategic importance for the development of environmentally friendly technologies such as electric vehicle batteries and wind turbines. That is why China strives to strengthen the position of its national currency.

According to experts, such moves contribute to de-dollarization. China has long been working to dethrone the dollar and replace it in commodity markets with the yuan. In the long run, Beijing plans to put a dent in the dollar's grip on the fossil fuel-powered global economy.

China's global leadership ambitions are well-founded. Currently, the country is a top supplier of resources needed for green production, such as rare earth metals.

China’s membership in the BRICS bloc and the Shanghai Cooperation Organization also contributes to the strengthening of the national currency. These alliances are assisting Beijing in bolstering the country's reach in the global commodity trade and creating a new financial system in which the dollar plays a minor role.

At the same time, Beijing is not going to wean the world off the greenback as that would deal a serious financial blow to the country's economy.