Second, the United States is at the forefront of the world in the fields of science and technology, education and culture, military affairs and finance. In particular, the powerful military power of the United States can ensure the security of trade between countries. The advanced technology level can also ensure that the United States can obtain high value-added profits as long as it is willing to sell some high-tech products, which also establishes the international status of the US dollar. At the same time, the United States has the largest GDP in the world, accounting for a quarter of the global GDP, and is the strongest economy in the world. From the perspective of comprehensive economic strength, the United States is the most powerful in the world, so the comparison of the US dollar is recognized by all countries in the world.
Third, the international hegemony of the dollar has been questioned by some countries. But you have to understand that from the 1980s to the present, the purchasing power of the US dollar has been basically stable, with little depreciation. And the real purchasing power of our RMB is shrinking. Ten thousand households were very popular in the 1980s. Nowadays, it is common to earn 10,000 yuan a month, and it is not unusual to have a million dollars in cash. In the past few decades, there has been a lot of room for RMB purchasing power depreciation, and it is estimated that there will be a lot of room for RMB purchasing power depreciation in the future. Because the purchasing power of RMB fluctuates greatly and is unstable, if RMB is used as the settlement currency internationally, it means that countries have to bear greater risks. If you earn 10000 RMB, there will be a big gap in purchasing power between now and a few years later.
Fourthly, in terms of foreign trade, China is a net exporter with a large surplus, while the United States is a commodity importer and the largest consumer market in the world. Then, China exports a lot of goods in exchange for other countries' currencies, while the United States imports a lot of cheap goods, which must be paid in dollars. In this case, it is difficult for RMB to flow into other countries, while the US dollar can circulate in the global commodity market.
Fifth, China's capital account is not fully open. For example, RMB is not freely convertible into US dollars, and US dollars are not freely convertible into RMB. If domestic money wants to go to China for foreign exchange, or foreign money wants to remit it to China, it will be restricted. However, at present, capital projects are actively opening up, such as relaxing the upper limit of foreign investors' investment in China A-share market, opening more free trade zones, establishing oil futures market, attracting foreign investors' investment and competing for the right to speak in the global oil market. It should be said that with the improvement of China's economic strength, the position of RMB in the international market has also improved significantly. But I'm afraid there is still a long way to go to replace the dollar.
The US dollar can become the world settlement currency, mainly because the United States has worked hard in this field for more than 70 years before becoming the overlord of the world monetary system. At the same time, unlike other central banks, the Fed has its own independence, and this mechanism is more trusted by all countries. More importantly, the purchasing power of the US dollar has been very stable, unlike the purchasing power of the RMB, which has been shrinking. Moreover, the United States is a major importer of goods, and the United States uses US dollars for settlement, so that US dollars can flow to the world more easily. Of course, China's capital account is not completely open, and funds can't come in and out at will, which is also one of the reasons that affect the internationalization of RMB.