China sees the yuan vs. dollar rivalry like Pepsi vs. Coke, expert says — ‘never the market leader, but serviceable in a pinch’

"Without a far larger pool of renminbi assets that foreigners can freely buy and sell, the renminbi cannot come close to replacing the dollar."

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Strategic motivation: Avoiding financial 'weaponization': Beijing aims to build an international RMB network primarily as a defensive hedge against the potential for U.S.-led financial sanctions, similar to the exclusion of Russia from the global financial system. By establishing a 'respectable second' currency, China seeks to constrain U.S. unilateral financial power without incurring the high costs or policy constraints associated with acting as the primary global reserve currency.
Structural barriers to global reserve status: The RMB lacks the requisite liquidity and investor trust to replace the dollar because China maintains tight capital controls to preserve state authority over capital allocation. Without a deep, liquid pool of renminbi-denominated assets that foreigners can trade freely, the RMB remains effectively limited in the global market, particularly in the critical area of capital reinvestment.
The 'Green Yuan' as a strategic leverage point: China is attempting to create a foundation for a 'green yuan' by forcing the pricing of critical minerals and green energy technology—sectors where China holds supply chain supremacy—in its own currency. This strategy aims to replicate the historical role of the 'petrodollar' by anchoring the currency to essential, hard-to-substitute industrial inputs, thereby creating a captive market for the RMB.