Essentially, what China has discovered is the greater usefulness of the eurodollar market vs the domestic US currency and capital markets. In the same way that European and other Asian countries (Asia Dollar Market) have used the dollar to further their international strategies without direct oversight from US regulators for many decades, China can effectively do the same. It just needs to hold enough dollars outside the US in both ICSDs and its Big Four policy banks - Sinodollars.

Current USD, gold, energy, and critical minerals hoarding by China doesn’t imperil the system, but it requires some counter measures. The media loves to frame these challenges as war, and hybrid warfare it surely is. But warfare is not war. It’s just an aggressive term for robust competition.