On April 22, Chinese regulators held an emergency meeting with foreign and domestic banks to develop strategies for protecting China’s overseas assets from American sanctions. The conference included bureaucrats from China’s central bank and finance ministry, as well as executives from several local and international lenders such as HSBC.
China is worried that in the event of a conflict, or some other crisis, it might have to bear the brunt of American sanctions similar to those imposed on Russia for the invasion of Ukraine. President Xi Jinping’s government has refused to cut ties with Russia. The Chinese banks are concerned that getting into large transactions with Russia might trigger America’s sanctions.
If China decides to provide military aid to Russia in the ongoing Ukraine war, or if it moves against Taiwan, it could face sanctions from America. China’s dollar-denominated assets include more than $1 trillion in US Treasury bonds and several high profile investments in America and Western Europe. For instance, China’s Dajia Insurance Group owns the Waldorf Astoria New York.
Like China, most major non-Western countries are worried about the safety of their overseas assets and their ability to trade globally, in case they get into a conflict with America and its allies. Like China, these countries are now engaged in developing strategies for saving their overseas assets and global trade. Suspicion of America’s economic power is at an all time high.
The dollar and the financial systems for conducting global trade are not conventional economic tools. These are the most deadly weapons in America’s arsenal. America has weaponized the dollar. It has weaponized its financial systems.
The American government has the power to wreck the economy of its enemies by putting a freeze on their overseas assets, and by hindering them from accessing global trade. America has misused this power several times in the past. This country has a long history of imposing sanctions on other countries for its political and economic agenda.
Since the Second World War, America has orchestrated more coups and wars than any other nation in history. It owns more puppet regimes and overseas military bases than any other nation in history. By using the threat of sanctions, America forces other countries to ignore or support its overseas misadventures.
The non-Western countries must develop their own globally acceptable currencies and financial systems for participating in global trade. A free and fair global market system cannot be created as long as the dollar is the global reserve currency and most of the global trading systems are under America’s control.