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When Statecrafts Collide

When Statecrafts Collide

(p.149) Seven When Statecrafts Collide
Currency Statecraft
Benjamin J. Cohen
University of Chicago Press

What happens when currency statecrafts collide? Although the potential for policy conflict between monetary rivals would appear, in principle, to be great, the modern era has actually seen remarkably little overt warfare between international moneys. With the emergence of China’s renminbi, however, we have an exception – a unique and potentially historic confrontation between a rising monetary power, China, seemingly committed to do all it can to move currency preferences in its favor, versus a long-time incumbent, the United States, that is unlikely to surrender its historical privileges without a fight. In terms of capabilities, it would seem, the advantage is all to the greenback, which is backed by power resources that – so far, at least – greatly outstrip anything available to the renminbi. But in terms of statecraft, Beijing has shown a determined and nimble strategic sensibility that is well beyond anything we have yet to see come out of Washington. Three questions are addressed in this chapter. First, why is the dollar-renminbi confrontation so exceptional? Second, how is the confrontation likely to turn out? And third, what are the implications for possible collisions of currency statecrafts in the future?

Keywords:   international money, currency statecraft, policy conflict, renminbi, dollar

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