This month, the Russian Academy of Sciences completed a study assessing the comprehensive strength of 193 countries across economic, technological, demographic, military, infrastructural and other dimensions. This annual assessment of national power is conducted using advanced methods of multivariate statistical analysis.
The latest results, calculated for 2025 and 2026, show the global balance of power has finally shifted from the United States towards China. Also, several regional power cores have emerged, including Russia and India, which are becoming potential centres of global geopolitics. The study shows China strengthening further, the US losing ground, and Russia and India consolidating their roles as regional power centres, while Germany faces a structural decline in competitiveness.
But the rapidly strengthening macro region led by China has encountered a constraint in the form of the global system’s financial core. At its centre remains the US dollar, which functions as the main economic instrument of American influence and allows the US to sustain debt-driven growth at the expense of the rest of the world.
In practice, these are unsecured debt obligations that circulate the globe as foreign reserves and units of settlement, while the resulting inflation returns not only to the US but also to all countries that hold dollar assets. The US Federal Reserve is finding it increasingly difficult to support the economy and contain inflation at the same time, and the contradiction between the global role of the dollar and the sustainability of its issuer is becoming more apparent.
The key issue, however, lies elsewhere. For China and the emerging macro region to continue their growth, it is essential to achieve greater financial sovereignty and to expand both existing and new trade routes denominated in yuan. This would reduce dependence on the Federal Reserve’s policy strategy and further strengthen China’s weight in the global economic system.
It should also be remembered that as international use of the yuan expands and the US dollar share declines, the relative position of the US will inevitably weaken. For decades, the US has financed its trade deficit through additional dollar issuance, creating an imbalance in which some nations produce real goods while others issue paper claims.
The yuan had become the world’s third-largest trade finance currency, trailing only the US dollar and the euro at the end of last year, according to a report by the China Banking Association. Photo: Getty Images
