China warned to prepare for being cut off from US dollar payment system

By Frank Tang in Beijing

June 24, 2020 “Information Clearing House” – China must prepare for the risks of being cut off from the US dollar payment system in case the United States sanctions Chinese companies and banks, just like Washington did with Russian institutions, a senior Chinese financial regulator said on Monday.

Fang Xinghai, a vice-chairman at the China Securities Regulatory Commission, said that as China mainly relies on the US dollar payment system in international deals, it makes it vulnerable to possible US sanctions.

“Such things have already happened to many Russian businesses and financial institutions. We have to make preparations early – real preparations, not just psychological preparations,” Fang said at a forum organised by Chinese media outlet Caixin.

Fang’s comment came at a time when Washington is pondering how far it should go to use the US dollar’s key role in international payment to punish Chinese individuals, companies and financial institutions for alleged involvement in issues such as Xinjiang and Hong Kong.

The US dollar payments system, which is underpinned by infrastructure such as the SWIFT international payments messaging system and the Clearing House Interbank Payments System (CHIPS), is the backbone for international trade and investment.

Fang’s speech showed that Beijing policymakers are factoring US financial sanctions as a realistic risk as being cut off from the US dollar system could seriously hinder an entity’s capabilities of conducting international business.

The risk, though, is seen to be low that China will be treated in the same way as Russia, after the US responded to numerous events, including the “annexation” of Crimea by Russia in 2014.

According to a US congressional research service document, dated March 30, the US imposed sanctions on Russia “in response to its invasion of Ukraine, election interference, other malicious cyber activities, human rights abuses, use of a chemical weapon, weapons proliferation, illicit trade with North Korea, and support to Syria and Venezuela”.

US President Donald Trump, for example, confirmed he held off on imposing tougher sanctions on Chinese officials blamed for a crackdown on China’s Uygur Muslim minority in Xinjiang as he feared that such moves could affect trade negotiations with Beijing, according to an interview published on Monday by American news website Axios.

But, despite that, there are growing signs of financial decoupling between the world’s two largest economies.

The US has increased scrutiny of Chinese firms listed within its borders, and many US-listed Chinese companies, including Alibaba, NetEase and, have floated shares in Hong Kong. Alibaba is the owner of the South China Morning Post.

At the same time, Fang said the value of the US dollar is facing an uncertain future due to additional money being printed by the US Federal Reserve, posing risks to China’s holdings of US dollar-denominated assets.

China holds over US$2 trillion of outbound investment stock, having increased it by US$110.6 billion last year, a vast majority of which is located in developed countries and

denominated in US dollars.

China also holds US$1.07 trillion of US treasury bills.

“Yuan internationalisation is a must to offset external financial pressure,” Fang added. “If our overseas assets were held in yuan, there won’t be such worries [over US dollar devaluation].”

The Chinese government has been trying to boost the international use of yuan in the last decade. It has obtained a nominal “reserve currency” status after it was included in the basket underlying the Special Drawing Rights, an accounting unit at the International Monetary Fund, however, the real cross-border use of yuan is still limited compared to the US dollar.

The Chinese currency’s share of international payments dropped to sixth, or 1.79 per cent of the global share in May, far behind the US dollar on 40.88 per cent, the Euro on 32.9 per cent, and the Japanese yen on 3.53 per cent, according to SWIFT data.

Frank Tang joined the SCMP in 2016 after a decade of China economy coverage and government policy analysis. – Source –

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4 Responses to “China warned to prepare for being cut off from US dollar payment system”

  1. quadcore says:

    Trump, Putin and Xi all have the ame boss…Its a hoax…always was.

    Phoney Wars for Phoney Peace and the Ministry of Fear .

    The Orwellian doctrine, Perpetual War for Perpetual Peace, has not been updated to the more practical version, “Phony Wars for Phony Peace.” The established governments have long since abandoned their exhortations to be patriotic, loyal and sacrificing for the higher good. It has proven impossible to maintain their former shibboleths as the excuse for human sacrifice. Indeed, sacrifice has reverted to its original mode, that of religious ritual. The previous rituals which conditioned the brainwashed victims to lay down their lives to propitiate the gods have been replaced by more psychological “correct” methods of persuasion, in which the victims nudge each forward in their anxiety to take their places, laying themselves down on the stone altars and baring their breasts to sacrificial knives, which slash open their bodies to remove the still-beating hearts.

  2. quadcore says:

    Secrets of the Federal Reserve
    by Eustace Mullins.

  3. quadcore says:

    Why Hiroshima Was Destroyed
    The Detailed History Of An Infamous Era
    By Eustace C. Mullins

    A very popular movie in Japan was Pride, The Fateful Moment, which shows Prime Minister General Hideki Tojo in a favorable light. With six others, he was hanged in 1968 as a war criminal. During his trial, his lawyers stated to the International Tribunal for the Far East, the Asian version of Nuremberg Trials, that Tojo’s war crimes could not begin to approach the dropping of the atomic bombs on Hiroshima and Nagasaki. The prosecutors immediately objected, and censored their statements. That was the last time there was any official recognition of the atomic bomb massacres in Japan. Japanese officials have been effectively prevented from taking any stand on this matter because the American military occupation, which officially ended in 1952 with the Treaty with Japan, was quietly continued. Today, 49,000 American troops are stillstationed in Japan, and there is no public discussion of the crimes of Hiroshima and Nagasaki.

    Cast of Characters

    The House of Rothschild; international bankers who made enormous profits during the nineteenth century, and used their money to take over governments.

    Bernard Baruch: New York agent of the Rothschilds who at the turn of the century set up the tobacco trust, the copper trust and other trusts for the Rothschilds. He became the grey eminence of the United States atomic bomb program when his lackey, J. Robert Oppenheimner, became director of the Los Alamos bomb development, and when his Washington lackey, James F. Byrnes, advised Truman to drop the atomic bomb on Hiroshima and Nagasaki.

    Albert Einstein; lifelong Zionist who initiated the United States’ atomic bomb program with a personal letter to President Franklin D. Roosevelt in 1939.

    The Secret History Of The Atomic Bomb

    SUBTITLE Why Hiroshima Was Destroyed – The Untold Story

    By Eustace C. Mullins

    June 1998

    The world was stunned to learn that India has now tested nuclear weapons. For many years, all nations have been concerned about the proliferation of atomic explosives. Even in their distress, no one seems to be interested in thehistoric or the psychological record of why these weapons were developed, and what special breed of mankind devoted themselves to this diabolical goal.

    Despite the lack of public interest, the record is clear, and easily available to anyone who is interested. My interest in this subject, dormant for many years was suddenly rekindled during my annual lecture tour in Japan. My hosts had taken me to the city of Nagasaki for the first time. Without telling me their plans, they entered the Nagasaki Atomic Bomb Museum. I thought it would be an interesting experience, but, to my surprise, when I walked into the exhibition rooms, I was suddenly overcome by sadness. Realizing that I was about to burst into tears, I moved away from my companions, and stood biting my lip. Even so, it seemed impossible to control myself. I was surrounded by the most gruesome objects, the fingers of a human hand fused with glass, a photograph of the shadow of a man on a brick wall; the man had been vaporized in the explosion .

  4. quadcore says:

    Let me tell you what was really going on. While Boesky and Levine were engaged in their penny ante operations, a gigantic financial plot, one might well say swindle, was being conducted to gain control of the major corporations for alien interests. The plot, quite simply, was to “buy” out or leverage these corporations by a consortium of international financiers who had unlimited capital at their command. The beauty of the plan was that, despite their unlimited capital, the conspirators would not put up any capital. Instead, they would create a new type of financial instrument, called a “junk bond”, to pay for their seizure of these American corporations. The financial writers of the U.S. routinely refer to Drexel Burnham Lambert as the “creators of the junk bond”. This is nonsense. The plan originated in Brussels, Belgium, at the offices of Banque Bruxelles Lambert. It is no accident that Brussels is the headquarters of NATO, which actually rules Europe in the name of the World Order, or that the head of NATO is Lord Carrington, a Rothschild relative, and partner of Henry Kissinger in the notorious international operation known as “Kiss Ass”, an irreverent Wall Street title for the firm of Kissinger Associates, wheelers and dealers for the World Order. Nor is it an accident that in the current White House crisis, as Reagan stands convicted in the eyes of the world as an international conspirator caught with his hands in the till with his Israeli co-conspirators, who had to be hastily summoned to “take over” the situation ? None other than Lt. Gen. Brent Scowcroft, a partner in Kissinger Associates ! Scowcroft is also a trustee of the Rand Corp., Georgetown Center for Strategic and International Studies, Council on Foreign Relations, and the US Air Force University; Lord Carrington has very close ties with the British royal Family, and is a director of continued on page Rio Tinto, one of the three firms on which the Rothschild fortune is based.

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