...since the end of the second world war...

...when the current system was built

Designed to establish the economic foundations of peace...

...on the bedrock of genuine international cooperation

But the economic disaster caused by the coronavirus pandemic...

...could signal a new chapter in financial history...

...with America's leadership called into question

Covid-19 has shown that America is failing to...

...sort out its own affairs at home, let alone provide global leadership

$484bn for loans, after the first round of funding ran out

Another huge spike in unemployment claims

With a vacuum emerging at the top of the financial order...

...China is vying to compete for greater control

This is not a case of China becoming Wall Street overnight

The crisis has provided China with an opportunity to show...

...what it's capable of doing, which in the long run will tip the balance of power

In global finance, America is king

It controls the world's financial plumbing

And accounts for almost a quarter of the world economy

The dollar makes up most central-bank reserves...

...and is the currency of international trade

80% of global supply chains use dollars...

...which gives America significant power

Whoever controls the flows of money at the end of the day...

...controls a lot of things in the economy...

...and ends up being the puppet master of a lot of...

...things that go on around the world

China hopes to correct this imbalance

There is a growing call from the international community...

...for reforming the global-economic-governance system...

...which is a pressing task for us

It already has the world's second-largest economy

Its banks are enormous

The banking sector has been growing fairly steadily for the past ten years

While in America, bank assets have remained relatively stable

And with European banks' assets falling...

...Chinese banks now have more assets than those in Europe or America

But most of their business is within China

Chinese banks account for only 7% of cross-border lending

So the banks' vast size hasn't translated...

...into influence within the world's financial system...

...yet

Its banks are becoming more active overseas

They are lending to companies, in particular...

...Chinese companies that are globalising

China is also giving its own currency a more prominent role

In commodities markets, it has convinced...

...a few companies to use the currency

Rio Tinto, which is one of the largest iron-ore miners in the world...

...issued its first contracts in yuan last year

The covid-19 pandemic could increase China's financial influence

China is now sharing its experience with the rest of the world...

...and providing much-needed supplies

30 tonnes of equipment to Italy, 500,000 surgical masks to Spain

Following the outbreak in Wuhan...

...China has positioned itself as a global leader...

...containing the outbreak...

...agreeing to deals to suspend repayment some of its loans...

...and charging ahead with vaccine development

The covid crisis, at least so far, has cast a negative shadow...

...on the capacity for leadership of America

It did not try or even show interest in...

...marshalling a global response to this crisis

It's going to disappear one day, it's like a miracle, it will disappear

This could offer an opportunity for China because...

...it's tried to fill the vacuum that America has left in terms of global leadership

China's tough response to the crisis...

...and the growing size and depth of its financial markets...

...have helped convince investors it's a safe bet...

...even as covid sent other markets crashing

While emerging markets saw the value of bonds plummet earlier this year

China's government bonds remained stable...

...which is a good gauge of trust in a country's economy

So, China has the second-biggest bond market in the world

Covid provided the first tests that this bond market could resist a crisis...

...in a way that typically emerging-market bonds don't

It shows investors trust China as an economy...

...that they don't think it's going to collapse overnight

As well as improving its reputation with international investors...

...China hopes to increase its hold over how money moves around the world

America has huge influence over the current system, thanks to SWIFT...

...the world's largest network for transferring money

It's a messaging system that allows financial institutions to communicate

It's meant to be geopolitically neutral

But because a majority of SWIFT transactions are in dollars...

...and these are routed through New York...

...America has used the system to choke its adversaries

Russia feared being excluded after its invasion of Crimea...

...and some Iranian banks were blocked from using the system in 2018...

...to enforce US sanctions

So, SWIFT is based in Belgium

So, it's supposed to be neutral. However, America has a strong influence over it

America can also threaten SWIFT with sanctions...

...if SWIFT does not do what America wants

This is very upsetting for its allies...

...which would rather the system stays neutral...

...and for the benefit of everyone

For now China can't hope to challenge America's dominance of SWIFT

Instead, Chinese companies are targeting...

...a different part of the financial system...

...the way in which consumers spend their money

Most consumer payments rely on American giants Visa and Mastercard

But Chinese tech companies have developed a series of apps...

...that disrupt this system

Rather than using bank accounts or credit cards for transactions...

...consumers load money into “digital wallets”

Consumers can then do almost anything...

...from paying parking fines to making investments or ordering taxis...

...without any of this money flowing through the banks

Creating a parallel financial ecosystem

This is potentially very disruptive to the financial system

It changes the way the money moves around the world

It empowers a new set of companies...

...which are so big that even the Chinese government is scared of them

Last year Chinese customers made mobile payments...

...worth a total of $49trn

And the two main Chinese companies offering this tech...

...Tencent and Ant Financial are enormous, with a billion users each

Covid-19 may increase their reach

People are doing more shopping online...

...trying to stay away from cash, which is seen as a potential contaminant

And this is all to the benefit of electronic-payment firms

Ant Financial and Tencent are already expanding overseas

Ant Financial's app Alipay is accepted in 56 countries and regions

And other digital-wallet firms are buying into their tech

Alipay's QR format has already been adopted by six European mobile wallets

America has reasons to be worried about the Chinese giants

They are getting bigger in the region because they are investing...

...their wallets in South-East Asia and beyond

And in effect it creates a system that is not reliant on...

...American companies, American standards, American norms

But China faces a major obstacle

Much of the world distrusts its intentions

China denying a cover-up

The top Chinese officials kept it quiet

After all, Chinese leaders initially denied and covered up the spread of covid-19

There's always a doubt about what is the ultimate objective...

...that China is pursuing in being so collaborative at the present time

It's not always transparent about the truth...

...and what happens in its own country

In a global financial system, you need transparency

You need to know the facts, what's going on...

...to make sure the system is in good health

As China's financial sphere of influence grows...

...it is unclear whether it will complement America's...

...by creating more competition, or undermine the existing system

In the end, what we could see is...

...the fragmentation of the global financial system in...

...an America-dominated sphere and a China-dominated sphere

These two systems don't have to be mutually exclusive

They could actually collaborate with each other

If they do, great. If they don't, then it will be harder...

...to move money around the world

It will be a costlier, more dangerous financial system

And in the end, most people will lose out

China may not become the dominant force in global finance any time soon

But covid-19 is helping to fast-track its progress

And as the world recovers from the virus...

...and economies begin to open up...

...China will be well placed to make significant gains

Thanks for watching

I'm Matthieu Favas, finance correspondent at The Economist

And if you want to read more about how...

...the covid crisis is going to change the financial system...

...please click the link opposite