• About Us
  • Careers
  • Brand Partnerships
TFI Official Merchandise
TFI English
TFI हिन्दी
Sunday, April 2, 2023
TFIGlobal
TFIGlobal
Right Arm. Round the World. FAST.
No Result
View All Result
  • Premium
  • Indo-Pacific
  • Americas
  • Canada
  • Indian Subcontinent
  • West Asia
  • Europe
  • Africa
  • The Caribbean
  • Premium
  • Indo-Pacific
  • Americas
  • Canada
  • Indian Subcontinent
  • West Asia
  • Europe
  • Africa
  • The Caribbean
TFIGlobal
TFIGlobal
No Result
View All Result

China started this year with dreams of global dominance. It can end the year by getting kicked out of the Dollar system

There goes the world domination dream

Akshay Narang by Akshay Narang
August 18, 2020
in Indo-Pacific
Reading Time: 3 mins read
0
china dollar system

(PC: Sun)

524
VIEWS
Share on FacebookShare on Twitter

China had started 2020 with the ambitions of world dominance, but it seems that its global ambitions would be done and dusted by the end of this year itself. The strong US-China decoupling is paving the way for big and brutal sanctions against China, and ultimately Washington could exercise the ultimate ‘Nuclear option’, that is, kicking China out of the global dollar-based system to destroy the Chinese economy.

China itself seems wary of the United States using the final option, that is, blocking Beijing’s use of Dollars for international payments. The US Dollars is the world’s premier reserve currency used for settlement of cross-border transactions. Therefore, anyone pushed out of the global dollars banking system gets marginalised and finds it hard to return to the mainstream. In this context, Chinese banks have already started complying with American sanctions on Hong Kong.

Also Read

Peru political crisis: Peru is making enemies everywhere

US outraged as Colombia offers drug traffickers a second chance

According to a Bloomberg report, the biggest of China’s state-run banks are now taking initial steps to comply with the US sanctions on 11 sanctioned Hong Kong officials, including the Hong Kong Chief Executive Carrie Lam. People familiar with the development have told Bloomberg that the Chinese state-run banks have turned cautious in opening new accounts for the sanctioned officials.

Meanwhile, one bank is said to have suspended the opening of new bank accounts for sanctioned Hong Kong officials. The reason behind the strict compliance with American sanctions is the risk of getting kicked out of the access to dollar funding and global dollars-based payments system.

The four largest Chinese banks- Industrial & Commercial Bank of China, the China Construction Bank, the Agricultural Bank of China, and the Bank of China understand that unlike Beijing, Washington’s dominance doesn’t work only on verbal threats. American sanctions can be painful because they do not only target officials, but also those institutions that provide financial services to sanctioned officials.

American sanctions actually work as a trap and if an institution violates it, then such institution itself gets weighed down when the US weaponizes the greenback’s dominance. This is how the US also entrapped North Korea, Iran, Russia and Venezuela into long-term financial crises.

Therefore, if Chinese banks continue to transact with the 11 sanctioned Hong Kong officials, then they themselves could get cut out of the dollars-based international system. A lot is at stake for the four largest Chinese banks. Last year, they had received 1.1 trillion US dollars funding. Now, if Trump weaponizes the dollar dominance, then the Chinese banking system would come crashing down with a severe 1.1 trillion Dollars jolt.

US-China tensions are at an all-time high, and the Trump administration is making a political issue out of the China challenge. Trump has already waged a trade war with Beijing, followed by attempts to throw China out of the global supply chains.

As tensions escalate even further in the run up to the US Presidential polls, there is every possibility of Trump kicking China out of the global dollars payment system to merge as a strong leader who shattered Beijing’s global dominance ambitions.

Beijing is itself treading cautiously, because despite several attempts it has failed to make Yuan a real international currency. China cannot bypass the greenback in international transactions, because the US dollar continues to dominate the cross-border settlements system. Following the 2015 stock market crash, Beijing has itself side-lined its Yuan internationalisation plans.

If the US kicks China out of the Dollar system, then it could prove to be the severest blow to the Chinese economy till date. An incapacitated China would find it virtually impossible to engage in global trade, if and when, the US exercises the nuclear option. And quite literally, the only option left with China would be barter trade- a true nightmare for the exports-based economy.

Tags: US
Share1070TweetSend
Previous Post

‘Won’t let China colonise us,’ Nigeria could soon shatter China’s BRI dreams in Africa

Next Post

The size of the Chinese market and the sheer volume of trade stops ASEAN from acting against China

Also Read

Japan underground shelters

Japan can’t protect Japanese if a war breaks out

March 23, 2023
TikTok app

West’s TikTok App wake-up call, too little, too late, or just too fake!

March 23, 2023
Taiwan coup

China plans a coup in Taiwan!

March 21, 2023
China Europe

US and Europe were happily ever after…until China showed up

March 12, 2023
Load More

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

I agree to the Terms of use and Privacy Policy.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

  • Trending
  • Comments
  • Latest
Romania’s rising star, Diana Sosoaca is making the West anxious

Romania’s rising star, Diana Sosoaca is making the West anxious

March 27, 2023
Did Ukraine use innocent civilians as human shield against Russia in the name of evacuation?

Did Ukraine use innocent civilians as human shield against Russia in the name of evacuation?

May 9, 2022
Trudeau just passed a law that could eradicate Canadian economy entirely

Trudeau just passed a law that could eradicate Canadian economy entirely

March 24, 2023
Bosnia- Herzegovina’s President decides to throw out every European and American agenda peddler

Bosnia- Herzegovina’s President decides to throw out every European and American agenda peddler

March 29, 2023
US dollar trade

South America joins the de-dollarisation bandwagon with a big announcement  

March 31, 2023
North Korea and China rekindle their lost lust for power

North Korea and China rekindle their lost lust for power

April 1, 2023
Patriot air defense systems

Is the defense establishment in the NATO’ jeopardising Ukraine’s chances

March 31, 2023
The west is cat fishing its soldiers

The west is cat fishing its soldiers

March 31, 2023
Peru political crisis: Peru is making enemies everywhere

Peru political crisis: Peru is making enemies everywhere

March 31, 2023
Drag performers Canada

Dragging Canada’s Future: How Drag Performances are destroying Canada’s future

March 31, 2023
Youtube Twitter Facebook
TFIGlobal
  • About us
  • Contact Us
  • Terms of use
  • Privacy Policy

©2023 - TFI MEDIA PRIVATE LIMITED

No Result
View All Result
  • Premium
  • Indo-Pacific
  • Americas
  • Canada
  • Indian Subcontinent
  • West Asia
  • Europe
  • Africa
  • The Caribbean

©2023 - TFI MEDIA PRIVATE LIMITED

Welcome Back!

Login to your account below

Forgotten Password?

Retrieve your password

Please enter your username or email address to reset your password.

Log In

Add New Playlist

Follow us on Twitter

and never miss an insightful take by the TFIGlobal team

Follow @tfiglobal
This website uses cookies. By continuing to use this website you are giving consent to cookies being used. View our Privacy and Cookie Policy.