China’s push to price oil in yuan has sparked headlines about a looming “petroyuan” supplanting the petrodollar. The idea resurfaces amid the US‑Israel war on Iran, but the reality remains that Beijing still depends on massive holdings of US dollars. Those dollar reserves, dubbed “sinodollars,” continue to underpin global liquidity.

Gulf states have joined China’s Cross‑border Interbank Payment System but spend earned yuan on Chinese drones and vehicles. Yuan‑settled Chinese goods trade reached 33.5 % in March‑April 2026, yet surplus yuan cannot be redeployed because onshore markets stay closed and dim‑sum bond issuance is shallow. East Asian exporters instead recycle over $1 tn of dollars each year into the global system.

The petrodollar’s power lay in Saudi‑earned dollars being reinvested worldwide, creating a liquidity stream. China lacks a surplus; its trade balance is positive, not deficit‑driven, so yuan cannot evolve into a reserve asset. If Beijing safeguards its sinodollars and caps capital outflows, the dollar’s dominance in oil and finance will persist. Consequently, investors continue to hold US Treasury securities as the safest store of value.