In this context, China can intensify efforts to promote the internationalization of the renminbi on three fronts, Zhang said, including increasing the proportion of the yuan as a global commodity pricing and settlement currency, and stepping up efforts to provide high-quality yuan-denominated assets, such as Chinese government bonds, to foreign investors.

　　Zhang highlighted the importance of accelerating the development of the Cross-border Interbank Payment System, which specializes in renminbi cross-border payments and clearing, and the Project mBridge, a cross-border platform for experimenting with central bank digital currencies — including the digital yuan — for international trade.

　　In the near term, dollar volatility remains high, Guan added. So far, financial markets have been pricing in recession fears as anticipation of a US economic slowdown and potential rate cuts by the US Federal Reserve weakened the dollar. The greenback could, however, bounce back if markets shift focus to US inflationary pressure and expect less rate cuts by the Fed.

　　“The US move to broadly raise tariffs is expected to push US inflation higher in the short term. Over the longer run, as the US tariff policy may trigger a global trade war, global economic growth could slow down. US inflation may then retreat sharply following a temporary rebound, with economic growth slowing further. In that scenario, we cannot rule out a repeat of the 1930s Great Depression,“ Guan said.

　　He drew parallels to the 1930 Smoot-Hawley Tariff Act, which drastically raised tariffs in the US. The legislation triggered retaliatory tariffs from major US trading partners, causing global trade to collapse and exacerbating the Great Depression.

　　On the renminbi, Guan said the yuan has remained generally steady against the dollar, despite weakening following the new tariff announcement.