Liu’s Bold Call: Why China’s New Economic Strategy Could Reshape Global Finance in 2025

Forget incremental tweaks—China's economic playbook just got a radical rewrite. A high-profile call for strategic overhaul lands as traditional finance grapples with its own identity crisis.

The Blueprint Shift

Details remain under wraps, but the directive is clear: pivot hard. This isn't about fine-tuning GDP targets. It's a fundamental recalibration of how the world's second-largest economy generates, allocates, and protects value. The old guard's playbook—reliant on heavy industry and property—looks increasingly like a legacy system ripe for disruption.

Digital-First, By Design

Observers point to the silent elephant in the room: digital asset infrastructure. While central banks elsewhere debate digital currencies, China's potential new strategy could leapfrog the debate entirely. Imagine state-backed economic policy that doesn't just tolerate blockchain efficiency but is built on it—streamlining supply chains, automating subsidies, and creating audit trails so transparent they make traditional auditors redundant.

The Global Ripple Effect

When China sneezes, the world still catches a cold. A genuine strategic pivot would send shockwaves through commodity markets, foreign exchange reserves, and global debt instruments. For crypto markets, it's a double-edged sword: validation of digital infrastructure's importance, paired with the looming specter of a state-controlled alternative that could make today's decentralized projects look like quaint experiments.

The bottom line? While Wall Street analysts scramble to update their PowerPoint decks with the new 'China narrative,' the real action might be bypassing their spreadsheets altogether. The future of value isn't being debated in boardrooms; it's being coded into a new economic operating system. And for once, the finance guys might be the last to know.

Liu calls for China to adopt a new economic strategy 

Liu pointed out that China had a trade surplus of approximately $1 trillion in 2024. Therefore, he elaborated that,  “If China can bring in more goods and services worth that amount and pay with yuan, it will greatly increase the liquidity of offshore yuan.” 

As a prominent Chinese economist and Vice Chairman of the China Development Research Foundation, Liu noted that backing a considerable increase in the yuan’s value WOULD help establish the currency as more popular globally. He also noted that this shift in strategy will enhance the purchasing power of Chinese residents when they travel internationally and promote spending.

Following his statement, sources highlighted that although Liu’s point of view may not represent official policies, it indicates escalating international pressure on China to balance its trade.

Considering the intense nature of the situation, reports indicate that French President Emmanuel Macron recently issued a warning, implying a high likelihood that the European Union might consider implementing strong measures against China. These measures included the possibility of imposing tariffs. Macron made clear that this decision will only be applicable if Beijing continues to ignore its surging trade imbalance with Europe. 

The EU’s goods trade deficit with China has surged nearly 60% since 2019, and France’s own trade gap with the $19 trillion economy continues to widen. Macron has long pushed for a united European approach to China and has repeatedly called for stronger safeguards to protect European industries from Chinese imports.

Macron noted that U.S. protectionism and China are both striking at the Core of our industrial and innovation model. And that, he said, was the worst-case scenario: he added that they had become the adjustment market. Macron warned that it was a matter of life or death for European industry.

In response, Beijing pledged to implement an effective strategy to boost domestic spending over the next five years. With this strategy, the city aims to lower its reliance on exports.

Moreover, sources revealed that China’s top leaders have publicly stated their intentions to improve local demand. They promised to make this plan their primary focus for 2026 to safeguard the economy from global risks associated with trade. These sources outlined this plan, citing a report from the Communist Party’s decision-making Politburo. 

China adopts strong measures to address emerging issues in the economy 

China is currently undergoing a gradual change in its economy. To support this claim, recent economic reports noted that retail sales in the country declined for the fifth consecutive month in October. This situation occurred despite a surge in exports, which caused China’s trade surplus to surpass $1 trillion last month.

At the same time, the state has reported taking a tough stance on increasing the yuan’s global prominence, particularly as the dollar faces challenges due to financial difficulties and concerns about the Federal Reserve’s independence. 

To accelerate the process of increasing the yuan’s popularity, Liu suggested that the country should launch more financial products in offshore markets and price them in yuan. Some of the products the prominent Chinese economist mentioned included bonds, stocks, funds, and derivatives.

According to Liu, “the share of yuan usage around the world should rise to reflect the importance of the Chinese economy better.” Notably, he served as an adviser on monetary policy for the People’s Bank of China from June 2018 to March 2024.

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