China: De-Dollarization bid continues amid Trade War

China diversifies away from the dollar into gold


As the trade war rages on, China’s de-dollarization bid continues. The trade war is taking a toll on the US and Chinese economies. China seems to be more on the losing end. There’s a trade imbalance between the two countries. So far, the iShares China Large-Cap ETF (FXI) has gained just 4.2% this year as of Tuesday amid trade war tensions. The SPDR S&P 500 ETF (SPY) has gained 19.3% during the same period.

China’s de-dollarization continues

The US has much more maneuverability to target Chinese imports. Also, due to trade uncertainty and tariff structure, many US companies are moving their production away from China, which impacts the country.

US companies moving away from China

Recently, Google (GOOGL) decided to move its Pixel production from China to Vietnam. Other companies including Amazon (AMZN), Apple (AAPL), and Microsoft (MSFT) are also looking for alternate supply locations.

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