7 The Capital War7 The Capital War9 The Capital War9 The Capital WarThe Capital WarChapter 7: US-China Relations and Wars2020-10-18Journal9 The Capital War7 The Capital War
China and the US are the largest trading countries, both accounting for about 13% of global trade (including exports and imports), yet the RMB accounts for only about 2% of world trade financing while the dollar accounts for over 50%. It would be pretty easy to increase the share of trade financing in RMB.
While China accounts for around 19% of world GDP\[9\] (and is growing at a faster rate than the US) and has around 15% of global equity market capitalization, it has only about 5% weight currently in MSCI equity indices and its assets represent only about 2% of foreign assets in portfolios. In contrast while the United States on the whole accounts for around 20% of world GDP and is growing slower, it now accounts for over 50% weight in MSCI equity indices and has around 48% of non-American money in it. My point is that Chinese markets are underinvested in because the investment has lagged the development, especially for foreign investors.