Cross Asset: Bretton Woods 3.0 – The new world order
Explore the shift to Bretton Woods 3.0, as China adapts its economic strategies amid global changes and rising geopolitical uncertainties.
Bretton Woods 3.0 marks a significant shift in the global economic landscape, moving away from the previous Bretton Woods 2.0 system that faltered post-2008. This new framework reflects a world where US tariffs are a permanent fixture, yet China's current account surplus remains resilient.
China's capital recycling model is evolving, prioritising security and supply chain stability over traditional financial returns. As geopolitical uncertainties rise, China is focusing on building productive capacity in emerging markets while diversifying its investments away from US Treasuries, which it may strategically liquidate.
The report highlights that China is transitioning from a debtor to a balance sheet creditor, with its non-reserve net position projected to become positive by 2025. This transformation indicates a loosening of the structural constraints that previously tied China to the US Treasury market, potentially increasing selling pressure on sovereign bonds.
Download the report for more detailed insights.
You might also be interested in
This report was brought to you by the Macro team
Reliable and consistent economic forecasts, analysis, models and scenarios provide the insight necessary to make informed decisions in a fast-changing world.
