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Opinion

Will China overthrow US dollar hegemony in East Asia?

Dependence on the dollar has long been a thorn in Beijing's side

| China
Yuan and dollar banknotes: the cards may now be set for a reshuffle.   © Reuters

Professor Gunther Schnabl is head of the Institute of Economic Policy at the University of Leipzig.

As the U.S. wavers under the weight of dire economic, social and health crises, historic measures introduced to stabilize the country have increased general government debt to 130% of gross domestic product. Most of the newly issued government bonds were purchased by the Federal Reserve, which has significantly inflated its balance sheet.

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