China’s nearly two-decade-long concerted campaign to internationalize the renminbi (RMB) is beginning to pay off. The RMB now ranks second globally in trade finance,1Caixin Global, “Chinese Yuan Edges Out Euro as Second-Most Used Currency in Global Trade Finance,” October 31, 2023, https://www.caixinglobal.com/2023-10-31/chinese-yuan-edges-out-euro-as-second-most-used-currency-in-global-trade-finance-102122297.html. surpassing the euro, while approximately 30 to 35% of China’s own cross-border goods trade is now settled in its own currency.2Zhu Hexin, “Firmly advancing in-depth reforms and high-level opening-up in the foreign exchange sector to support high-quality economic development” (speech, 16th Lujiazui Forum, Shanghai, June 18, 2025), Bank for International Settlements, July 7, 2025, https://www.bis.org/review/r250701e.htm. That percentage is projected to increase. Moreover, a protracted Hormuz crisis coupled with China’s aggressive push for RMB pricing in energy and bulk commodities has further accelerated RMB adoption among energy exporters with direct China exposure.3Established RMB-denominated commodity benchmarks include the Shanghai Futures Exchange (SHFE), Dalian Commodity Exchange (DCE), and Zhengzhou Commodity Exchange (ZCE), and Shanghai International Energy Exchange (INE).
Trade and settlement aside, an even more impressive accomplishment is China’s ability to scale up parallel financial infrastructure, such as the Cross-Border Interbank Payment System (CIPS),4The Cross-Border Interbank Payment System (CIPS) is China’s yuan-denominated cross-border clearing and settlement infrastructure that was launched by the PBoC in 2015. the Chinese payment and settlement system. It seeks to compete with SWIFT,5SWIFT stands for Society for Worldwide Interbank Financial Telecommunication, which provides a secure messaging network that allows financial institutions to exchange standardized financial instructions with one another across the world. the world’s primary secure messaging system that processes a dominant share of transactions in U.S. dollars. An estimate of over 50% of flows through the CIPS payment system are now denominated in RMB, enabling yuan-settled energy trades outside of SWIFT, also known as ‘off the dollar rails’.6‘Dollar rails’ are the networks, institutions, and processes that make the U.S. dollar the dominant currency for global trade and finance. The ability to directly clear and settle RMB is widely viewed as an attempt to neutralize a U.S. threat of using SWIFT as a sanction tool, thus weakening its leverage.
Despite progress made in elevating the RMB on the global stage, the yuan remains a long way away from challenging the U.S. dollar as the world’s reserve currency. As of early 2026, the share of RMB holdings in foreign exchange reserves remained at an anemic 2% compared to 57% for the US dollar.7IMF’s data showed that the RMB accounts for ~1.95% of global foreign exchange reserves as of 2026, making it the fifth-largest reserve currency. https://data.imf.org/en/datasets/IMF.STA:COFER China’s restrictions on capital outflows, administrative management of the exchange rate, and regulatory uncertainty reduce the attractiveness of RMB-denominated assets relative to U.S. Treasury securities and other dollar assets, where free movement of capital is guaranteed. As a result, while the RMB’s role in trade settlement has expanded considerably, its share of global foreign exchange reserves and international financial transactions remains modest compared to the U.S. dollar and the euro.
Yet the very strategy that seeks to expand China’s global economic and financial influence also exposes a fundamental tension at the heart of its economic model. The deliberate policy choice to remain neo-mercantilist8Neo-mercantilism refers to the modern economic policy where the state actively intervenes in the economy to promote exports, limit imports, protect domestic industries, and strengthen national power. and to pursue strategic autarky9Strategic autarky refers to the pursuit of strategic economic self-sufficiency, whereby a state seeks to minimize dependence on foreign countries for critical goods, technologies, energy, finance, and supply chains in order to preserve national security and strategic autonomy. produce several paradoxes. On one hand, China has mounted ambitious campaigns to internationalize the RMB and enhance its financial influence globally; on the other hand, it maintains a tight grip on capital flows, financial stability, and monetary-policy autonomy that preserves strategic autonomy. The decades-long reform and opening up to the world produced an economic miracle unparalleled in human history, yet the interdependencies as a result of free trade and integration handed China powerful strategic leverage to influence the behaviour of others through non-military means. The internationalization of RMB sits at the faultline of these two strategic objectives – supporting its neo-mercantilist economic model while pursuing greater financial autonomy.
Just as China has used trade and industrial policy to build external economic dependence, it is increasingly using the RMB and financial infrastructure to translate commercial power into financial influence. A useful way to frame China’s RMB internationalization strategy is to distinguish between offensive and defensive geo-economic objectives. On one hand, a neo-mercantilist economic model seeks to create asymmetric interdependence that enhances China’s influence over others – an offensive strategy; while strategic autarky seeks to reduce China’s own exposure to external coercion – a defensive strategy. RMB internationalization accomplishes both objectives, even though they are constrained by Beijing’s capital account controls.
Expanding China’s financial influence by creating greater dependency on the RMB sits at the core of the neo-mercantilist economic model. The use of the RMB in trade settlement, cross-border payments, and bilateral financing, particularly among countries seeking to reduce dependence on the U.S. dollar, has been widely regarded as the first step toward RMB internationalization. It is also the area that has seen the most significant progress. Early in the US-Iran war, Al Jazeera reported that Iran began accepting payments in the Chinese currency to allow freighters to transit the Strait of Hormuz, giving new momentum to RMB-denominated energy trade.10John Power, “In Strait of Hormuz, Iran and China take aim at US dollar hegemony,” Al Jazeera, April 8, 2026, https://www.aljazeera.com/economy/2026/4/8/in-strait-of-hormuz-iran-and-china-take-aim-at-us-dollar-hegemony. Furthermore, China has become the leading trade partner of the Gulf Cooperation Council (GCC) member states,11The GCC states are Saudi Arabia, the United Arab Emirates, Qatar, Kuwait, Oman, and Bahrain surpassing the bloc’s combined trade totals with the European Union, the United Kingdom and the United States.12Mingyuan Tan, Yixuan Xie, Xinyu Cui, and Yanan Xiao, “The Current Relationship between the People’s Republic of China and the Monarchies of the Gulf Cooperation Council,” Middle East Political and Economic Institute, June 28, 2026, https://mepei.com/the-current-relationship-between-the-peoples-republic-of-china-and-the-monarchies-of-the-gulf-cooperation-council/.
Over the past decade, China has significantly expanded the use of the RMB through establishing offshore RMB markets in financial centers such as London, Hong Kong and Singapore, setting up bilateral currency swap agreements with 40 central banks, and promoting RMB-denominated investment through programs such as the Bond Connect and Stock Connect schemes. More recently, the People’s Bank of China (PBoC) launched a repo facility to allow foreign central banks and sovereign wealth funds to obtain RMB liquidity by pledging Chinese government bonds.13Repo stands for repurchase agreement, where the borrower of cash sells securities (often safe assets like government bonds) as collateral to obtain cash, with the promise to pay back the cash with interest in exchange for the return of securities Deepening RMB capital market capability is essential to transforming it from a vehicle for trade settlement into a credible international currency.
RMB internationalization is an explicit policy priority in China’s 15th Five-Year Plan (2026-2030).14Outline of the 15th Five-Year Plan for National Economic and Social Development (2026–2030), approved by the National People’s Congress, March 2026. For an overview, see “China approves 2026-2030 blueprint, maps out high-quality path toward modernization,” March 13, 2026, https://english.www.gov.cn/news/202603/13/content_WS69b36c11c6d00ca5f9a09d96.html. U.S. sanctions in recent years have created strong incentives for sanctioned economies, and increasingly for other countries concerned about future sanctions, to use the RMB and Chinese payment infrastructure as an alternative to the dollar-based system. Building the capacity to remain connected to global markets, even in the face of external coercion, has therefore become a strategic imperative for China.
Since RMB became the world’s third-largest payment currency in 2025, CIPS has seen rising transaction volumes with a fast-expanding network of 210 direct participants and over 1,600 indirect participants from 180 countries and regions. In April 2026, CIPS set a single-day record for transaction volume of over 1 trillion yuan (US150 Billion) amid geopolitical volatility.15Sylvia Ma, “China’s yuan settlements hit record, and the Iran conflict is looking like a catalyst,” South China Morning Post, April 9, 2026, https://www.scmp.com/economy/global-economy/article/3349516/chinas-yuan-settlements-hit-record-and-iran-conflict-looking-catalyst.
Coupled with digital innovation such as the e-CNY initiative16The e-CNY (or digital yuan) is the official digital currency of China. Issued by the PBoC, it is a central bank digital currency (CBDC) designed to replace physical cash and work alongside existing mobile payment apps and Project mBridge,17mBridge (Multiple Central Bank Digital Currency Bridge) is a blockchain-based platform that allows instant, low-cost, cross-border payments and foreign exchange using digital central bank money, bypassing traditional correspondent banking networks like SWIFT the two complementary channels form a “dual-engine” cross-border payment model that bypasses traditional dollar-clearing infrastructure entirely. Together, they reinforce China’s pursuit of strategic autarky — using the e-CNY and mBridge to further expand the RMB internationally while insulating its financial system from dependence on dollar-centric infrastructure.
China’s RMB internationalization is simultaneously an instrument to exert external power and a tool to establish internal resilience. At the core of the two strategic imperatives lies the central policy trade-off — China’s mercantilist ambitions favour a widely used RMB that foreign firms, investors, and central banks are willing to hold and transact in; while strategic autarky favours maintaining capital controls and state oversight to protect domestic financial stability and preserve policy autonomy. To what extent can China advance one strategic goal without hindering the other? The answer may lie in digital currency and alternative payment systems. The recent progress in e-CNY, Project mBridge, and BRICS payment initiatives can significantly expand cross-border settlement while preserving tight control over domestic capital flows.18BRICS Pay is a decentralized digital payment platform designed to enable cross-border transactions among BRICS+ member nations using their local currencies If further progress can be achieved, they will gradually chip away at the “exorbitant privilege”19Exorbitant privilege refers to the unique economic advantages the United States enjoys because the U.S. dollar is the world’s primary reserve currency. enjoyed by the U.S. dollar by giving countries greater capacity to transact outside dollar-based financial infrastructure. That future might not be too far away.
The Western powers have failed to effectively manage the increasing threat of proliferation in the Middle East. While the international community is concerned with Iran’s nuclear program, Saudi Arabia has moved forward with developing its own nuclear program, and independent studies show that Israel has longed possessed dozens of nuclear warheads. The former is a member of the treaty on the Non-Proliferation of Nuclear Weapons (NPT), while the latter has refused to sign the international agreement.
On Middle East policy, the Biden campaign had staunchly criticized the Trump administration’s unilateral withdrawal from the Joint Comprehensive Plan of Action (JCPOA), more commonly known as the Iran Nuclear Deal and it has begun re-engaging Iran on the nuclear dossier since assuming office in January 2021. However, serious obstacles remain for responsible actors in expanding non-proliferation efforts toward a nuclear-free zone in the Middle East.
This panel will discuss how Western powers and multilateral institutions, such as the IAEA, can play a more effective role in managing non-proliferation efforts in the Middle East.
Panelists:
– Peggy Mason: Canada’s former Ambassador to the UN for Disarmament
– Mark Fitzpatrick: Associate Fellow & Former Executive Director, International Institute for Strategic Studies (IISS)
– Ali Vaez: Iran Project Director, International Crisis Group
– Negar Mortazavi: Journalist and Political Analyst, Host of Iran Podcast
– David Albright: Founder and President of the Institute for Science and International Security
Closing (5:45 PM – 6:00 PM ET)
What is the current economic landscape in the Middle East? While global foreign direct investment is expected to fall drastically in the post-COVID era, the World Bank reported a 5% contraction in the economic output of the Middle East and North African (MENA) countries in 2020 due to the pandemic. While oil prices are expected to rebound with normalization in demand, political instability, regional and geopolitical tensions, domestic corruption, and a volatile regulatory and legal environment all threaten economic recovery in the Middle East. What is the prospect for economic growth and development in the region post-pandemic, and how could MENA nations promote sustainable growth and regional trade moving forward?
At the same time, Middle Eastern diaspora communities have become financially successful and can help promote trade between North America and the region. In this respect, the diaspora can become vital intermediaries for advancing U.S. and Canada’s business interests abroad. Promoting business diplomacy can both benefit the MENA region and be an effective and positive way to advance engagement and achieve foreign policy goals of the North Atlantic.
This panel will investigate the trade and investment opportunities in the Middle East, discuss how facilitating economic engagement with the region can benefit Canadian and American national interests, and explore relevant policy prescriptions.
Panelists:
– Hon. Sergio Marchi: Canada’s Former Minister of International Trade
– Scott Jolliffe: Chairperson, Canada Arab Business Council
– Esfandyar Batmanghelidj: Founder and Publisher of Bourse & Bazaar
– Nizar Ghanem: Director of Research and Co-founder at Triangle
– Nicki Siamaki: Researcher at Control Risks
The Middle East continues to grapple with violence and instability, particularly in Yemen, Syria and Iraq. Fueled by government incompetence and foreign interventions, terrorist insurgencies have imposed severe humanitarian and economic costs on the region. Meanwhile, regional actors have engaged in an unprecedented pursuit of arms accumulation. Saudi Arabia and the United Arab Emirates have imported billions of both Western and Russian-made weapons and funded militant groups across the region, intending to contain their regional adversaries, particularly Iran. Tehran has also provided sophisticated weaponry to various militia groups across the region to strengthen its geopolitical position against Saudi Arabia, UAE, and Israel.
On the other hand, with international terrorist networks and intense regional rivalry in the Middle East, it is impractical to discuss peace and security without addressing terrorism and the arms race in the region. This panel will primarily discuss the implications of the ongoing arms race in the region and the role of Western powers and multilateral organizations in facilitating trust-building security arrangements among regional stakeholders to limit the proliferation of arms across the Middle East.
Panelists:
Luciano Zaccara: Assistant Professor, Qatar University
Dania Thafer: Executive Director, Gulf International Forum
Kayhan Barzegar: Professor and Chair of the Department of Political Science and International Relations at the Science and Research Branch of Azad University
Barbara Slavin: Director of Iran Initiative, Atlantic Council
Sanam Shantyaei: Senior Journalist at France24 & host of Middle East Matters
The emerging regional order in West Asia will have wide-ranging implications for global security. The Biden administration has begun re-engaging Iran on the nuclear dossier, an initiative staunchly opposed by Israel, while also taking a harder line on Saudi Arabia’s intervention in Yemen. Meanwhile, key regional actors, including Qatar, Iraq, and Oman, have engaged in backchannel efforts to bring Iran and Saudi Arabia to the negotiating table. From a broader geopolitical perspective, with the need to secure its energy imports, China is also expected to increase its footprint in the region and influence the mentioned challenges.
In this evolving landscape, Western powers will be compelled to redefine their strategic priorities and adjust their policies with the new realities in the region. In this panel, we will discuss how the West, including the United States and its allies, can utilize multilateral diplomacy with its adversaries to prevent military escalation in the region. Most importantly, the panel will discuss if a multilateral security dialogue in the Persian Gulf region, proposed by some regional actors, can help reduce tensions among regional foes and produce sustainable peace and development for the region.
Panelists:
– Abdullah Baabood: Academic Researcher and Former Director of the Centre for Gulf Studies, Qatar University
– Trita Parsi: Executive Vice-President, Quincy Institute for Responsible Statecraft
– Ebtesam Al-Ketbi: President, Emirates Policy Centre
– Jon Allen: Canada’s Former Ambassador to Israel
– Elizabeth Hagedorn: Washington correspondent for Al-Monitor
Military interventions, political and economic instabilities, and civil unrest in the Middle East have led to a global refugee crisis with an increasing wave of refugees and asylum seekers to Europe and Canada. Moreover, the COVID-19 pandemic has, in myriad ways, exacerbated and contributed to the ongoing security threats and destabilization of the region.
While these challenges pose serious risks to Canadian security, Ottawa will also have the opportunity to limit such risks and prevent a spillover effect vis-à-vis effective humanitarian initiatives in the region. In this panel, we will primarily investigate Canada’s Middle East Strategy’s degree of success in providing humanitarian aid to the region. Secondly, the panel will discuss what programs and initiatives Canada can introduce to further build on the renewed strategy. and more specifically, how Canada can utilize its policy instruments to more effectively deal with the increasing influx of refugees from the Middle East.
Panelists:
Erica Di Ruggiero: Director of Centre for Global Health, University of Toronto
Reyhana Patel: Head of Communications & Government Relations, Islamic Relief Canada
Amir Barmaki: Former Head of UN OCHA in Iran
Catherine Gribbin: Senior Legal Advisor for International and Humanitarian Law, Canadian Red Cross
In 2016, Canada launched an ambitious five-year “Middle East Engagement Strategy” (2016-2021), committing to investing CA$3.5 billion over five years to help establish the necessary conditions for security and stability, alleviate human suffering and enable stabilization programs in the region. In the latest development, during the meeting of the Global Coalition against ISIS, Minister of Foreign Affairs Marc Garneau announced more than $43.6 million in Peace and Stabilization Operations Program funding for 11 projects in Syria and Iraq.
With Canada’s Middle East Engagement Strategy expiring this year, it is time to examine and evaluate this massive investment in the Middle East region in the past five years. More importantly, the panel will discuss a principled and strategic roadmap for the future of Canada’s short-term and long-term engagement in the Middle East.
Panelists:
– Ferry de Kerckhove: Canada’s Former Ambassador to Egypt
– Dennis Horak: Canada’s Former Ambassador to Saudi Arabia
– Chris Kilford: Former Canadian Defence Attaché in Turkey, member of the national board of the Canadian International Council (CIC)
– David Dewitt: University Professor Emeritus, York University
While the United States continues to pull back from certain regional conflicts, reflected by the Biden administration’s decision to halt American backing for Saudi Arabia’s intervention in Yemen and the expected withdrawal from Afghanistan, US troops continue to be stationed across the region. Meanwhile, Russia and China have significantly maintained and even expanded their regional activities. On one hand, the Kremlin has maintained its military presence in Syria, and on the other hand, China has signed an unprecedented 25-year strategic agreement with Iran.
As the global power structure continues to shift, it is essential to analyze the future of the US regional presence under the Biden administration, explore the emerging global rivalry with Russia and China, and at last, investigate the implications of such competition for peace and security in the Middle East.
Panelists:
– Dmitri Trenin: Director of Carnegie Moscow Center
– Joost R. Hiltermann: Director of MENA Programme, International Crisis Group
– Roxane Farmanfarmaian: Affiliated Lecturer in International Relations of the Middle East and North Africa, University of Cambridge
– Andrew A. Michta: Dean of the College of International and Security Studies at Marshall Center
– Kelley Vlahos: Senior Advisor, Quincy Institute
The security architecture of the Middle East has undergone rapid transformations in an exceptionally short period. Notable developments include the United States gradual withdrawal from the region, rapprochement between Israel and some GCC states through the Abraham Accords and the rise of Chinese and Russian regional engagement.
With these new trends in the Middle East, it is timely to investigate the security implications of the Biden administration’s Middle East policy. In this respect, we will discuss the Biden team’s new approach vis-à-vis Iran, Yemen, Saudi Arabia, and Israel. The panel will also discuss the role of other major powers, including China and Russia in shaping this new security environment in the region, and how the Biden administration will respond to these powers’ increasing regional presence.
Panelists:
– Sanam Vakil: Deputy Director of MENA Programme at Chatham House
– Denise Natali: Acting Director, Institute for National Strategic Studies & Director of the Center for Strategic Research, National Defense University
– Hassan Ahmadian: Professor of the Middle East and North Africa Studies, University of Tehran
– Abdulaziz Sagar: Chairman, Gulf Research Center
– Andrew Parasiliti: President, Al-Monitor
