Petro-yuan =/= reserve currency.

USD reserve = print USD for everything liquidity to sustain debt financed existence where Triffin hollows out industry, and financialize everything because having stupid amount of liquidity incentivizes certain behaviors.

Petro-yuan = PRC gives swap lines to trusted partners to buy oil denominated in yuan in exchange for things like resources. Hormuz ships ~1 trillion USD worth energy that needs "swapping" - incidentally PRC imports around ~2-3 trillion, more than enough to cover.

So think petro-yuan = PRC gives trusted countries with resources that PRC bonds credit lines to buy yuan denominated energy (possibly at discount), in return they guarantee PRC resources or other commercial/geopolitical arrangements. It will be narrow, not like USD brrrting reserves.

This benefits PRC because get to have leverage over "need" transactions (countries need energy to survive, it's no negotiate) while US keeps supporting "want" transactions by reserve debt servicing blackhole that US cannot extricate itself from until it debases / technical defaults. PRC best game plan is... assume privileged part of exorbitant privilege, while leaving US the exorbitant.

Yes, but for a consumption addicted society like the US, an abrupt end to the petrodolar would be an incredibly traumatic event.

Think about it, every single mother fucking year, the US roughly buys 1 trillion dollars more on services and goods from the rest of the world, than it sells.

It has this privilege/curse basically because the US dollar IS the world's global commerce and finance currency.

The petrodollar confers a huge advantage to the US, which is the whole point of it. It soaks up liquidity and allows the US to export inflation which allows it to be in the insanely profitable business of printing money. An argument could be made that this is corrupting and economically distorting to society resulting in a net negative but there is no guarantee that the same corruption would undermine China in a timely manner. I think the effect would be rather muted provided that the US remains world hegemon but if the US would lose the petrodollar and credible force projection at the same time we will shift from the current looting stages of collapse to the free for all stage of collapse. Or put another way, from a managed decline to an unmanaged decline.

Why?

long term in a sense of centuries? i think they can afford this.

Or not. It depends on policies other than just being reserved currency

>Ironically, if yuan becomes new petroleum currency, it might hurt Chinese long term.

Agreed. Which is why the Chinese do NOT want their currency to become the Petrodollar or world's reserve currency. They know that that is what destroyed US Manufacturing. China wants to maintain their manufacturing dominance. They've seen what de-industrialization has done to the US.

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