Hedging. Not De-Dollarization

China’s financial moves prepare for shocks but keep the dollar at the center

China isn't dismantling the dollar. It's building insurance against a system that can shut it out overnight.

The 2022 freeze on Russia's $300B was the wake-up call. Since then, de-dollarization makes headlines while balance sheets show something more mundane: hedging.

Yuan sits at ~3% of global payments. Trade finance climbs to ~6%. Reserves lag at 2.3%. Sterling still beats it at 4.8%.

The dollar sits near 58% of reserves, $750B trading daily in Treasuries.

Building the Plumbing

CIPS cleared ¥175.5 trillion in 2024, up 43% year-over-year. Hungary issued a ¥5B panda bond in July. Russia settles in RMB because it has no choice.

Gold tells a different story. The People's Bank of China restarted purchases mid-2024. Nine consecutive months through July 2025. Other central banks followed.

Chinese Treasury holdings dropped from $1.3T to under $800B. But Euroclear data reveals transfers, not exits. The money moved offshore through Belgium. Still dollar-denominated.