Connect with us

Politics

U.S. Healthcare is a Global Outlier, and Not in a Good Way

Published

on

Historically, the United States has spent more money than any other country on healthcare.

In the late 1990s, for example, the U.S. spent roughly 13% of GDP on healthcare, compared to about a 9.5% average for all high income countries.

However, in recent years, the difference has become more stark. Last year, as Obamacare continued to roll out, costs in the U.S. reached an all-time high of 17.5% of GDP. That’s over $3 trillion spent on healthcare annually, and the rate of spending is expected accelerate over the next decade.

High Costs, High Benefit?

With all that money being poured into healthcare, surely the U.S. must be getting better care in contrast to other high income countries.

At least, that’s what one would think.

Today’s chart comes to us from economist Max Roser (h/t @NinjaEconomics) and it shows the extreme divergence of the U.S. healthcare system using two simple stats: life expectancy vs. health expenditures per capita.

U.S. Healthcare is a Global Outlier, and Not in a Good Way

The Divergence of U.S. Healthcare

As you can see, Americans are spending more money – but they are not receiving results using the most basic metric of life expectancy. The divergence starts just before 1980, and it widens all the way to 2014.

It’s worth noting that the 2015 statistics are not plotted on this chart. However, given that healthcare spend was 17.5% of GDP in 2015, the divergence is likely to continue to widen. U.S. spending is now closing in on $10,000 per person.

Perhaps the most concerning revelation from this data?

Not only is U.S. healthcare spending wildly inefficient, but it’s also relatively ineffective. It would be one thing to spend more money and get the same results, but according to the above data that is not true. In fact, Americans on average will have shorter lives people in other high income countries.

Life expectancy in the U.S. has nearly flatlined, and it hasn’t yet crossed the 80 year threshold. Meanwhile, Chileans, Greeks, and Israelis are all outliving their American counterparts for a fraction of the associated costs.

Click for Comments

Politics

The Start of De-Dollarization: China’s Gradual Move Away from the USD

The de-dollarization of China’s trade settlements has begun. What patterns do we see in USD and RMB use within China and globally?

Published

on

An area chart illustrating the de-dollarization of China’s trade settlements.

Published

on

The following content is sponsored by The Hinrich Foundation

The Start of De-Dollarization: China’s Move Away from the USD

Since 2010, the majority of China’s cross-border payments, like those of many countries, have been settled in U.S. dollars (USD). As of the first quarter of 2023, that’s no longer the case.

This graphic from the Hinrich Foundation, the second in a three-part series covering the future of trade, provides visual context to the growing use of the Chinese renminbi (RMB) in payments both domestically and globally.  

The De-Dollarization of China’s Cross-Border Transactions

This analysis uses Bloomberg data on the share of China’s payments and receipts in RMB, USD, and other currencies from 2010 to 2024. 

In the first few months of 2010, settlements in local currency accounted for less than 1.0% of China’s cross-border payments, compared to approximately 83.0% in USD. 

China has since closed that gap. In March 2023, the share of the RMB in China’s settlements surpassed the USD for the first time.

DateRenminbiU.S. DollarOther
March 20100.3%84.3%15.4%
March 20114.8%81.3%13.9%
March 201211.5%77.1%11.5%
March 201318.1%72.7%9.2%
March 201426.6%64.8%8.6%
March 201529.0%61.9%9.0%
March 201623.6%66.7%9.7%
March 201717.6%72.5%9.9%
March 201823.2%67.4%9.4%
March 201926.2%65.1%8.7%
March 202039.3%54.4%6.3%
March 202141.7%52.6%5.6%
March 202242.1%53.3%4.7%
March 202348.4%46.7%4.9%
March 202452.9%42.8%4.3%

Source: Bloomberg (2024)

Since then, the de-dollarization in Chinese international settlements has continued.  

As of March 2024, over half (52.9%) of Chinese payments were settled in RMB while 42.8% were settled in USD. This is double the share from five years previous. According to Goldman Sachs, foreigners’ increased willingness to trade assets denominated in RMB significantly contributed to de-dollarization in favor of China’s currency. Also, early last year, Brazil and Argentina announced that they would begin allowing trade settlements in RMB. 

Most Popular Currencies in Foreign Exchange (FX) Transactions

Globally, analysis from the Bank for International Settlements reveals that, in 2022, the USD remained the most-used currency for FX settlements. The euro and the Japanese yen came in second and third, respectively.

Currency20132022Change (pp)
U.S. Dollar87.0%88.5%+1.5
Euro33.4%30.5%-2.9
Yen23.0%16.7%-6.3
Pound Sterling11.8%12.9%+1.1
Renminbi2.2%7.0%+4.8
Other42.6%44.4%+1.8
Total200.0%200.0%

Source: BIS Triennial Central Bank Survey (2022). Because two currencies are involved in each transaction, the sum of the percentage shares of individual currencies totals 200% instead of 100%.

The Chinese renminbi, though accounting for a relatively small share of FX transactions, gained the most ground over the last decade. Meanwhile, the euro and the yen saw decreases in use. 

The Future of De-Dollarization

If the RMB’s global rise continues, the stranglehold of the USD on international trade could diminish over time.  

The impacts of declining dollar dominance are complex and uncertain, but they could range from the underperformance of U.S. financial assets to diminished power of Western sanctions.

However, though the prevalence of RMB in international payments could rise, a complete de-dollarization of the world economy in the near- or medium-term is unlikely. China’s strict capital controls that limit the availability of RMB outside the country, and the nation’s sputtering economic growth, are key reasons contributing to this.

The third piece in this series will explore Russia’s shifting trading patterns following its invasion of Ukraine.

Visual Capitalist Logo

Visit the Hinrich Foundation to learn more about the future of geopolitical trade

Click for Comments

You may also like

Appian-Capital

Subscribe

Continue Reading

Subscribe

Popular