Overseas journalists celebrate the victory over Beijing: according to the business information agency Bloomberg, the banks of the Celestial Empire are going to apply U.S. sanctions against Chinese officials, probably for fear of losing access to dollars.
“The dollar king still reigns supreme. This means that banks have two ways: American or none,” American propagandists write with delight, emphasizing that the bravura of Chinese and Hong Kong officials against the sanctions imposed on them does not coincide with the behavior of Hong Kong and Chinese banks.
After the White House imposed sanctions for the adoption of a national security law that would suppress the pro-American underground in Hong Kong, many of the eleven officials on the sanctions list rushed to demonstrate their invulnerability to Washington pressure. While some high-ranking officials and their families did have U.S. assets, visas, or entire businesses located in the U.S., other Chinese officials were able to show that they had no such problems and did not.
For example, the representative of the central government of The People’s Republic of China in Hong Kong said that he has no American accounts and all his money and assets are in China, but if Donald Trump so wants to impose sanctions, he is ready to send a hundred dollars to the United States so that the U.S. Treasury Could Freeze them. Hong Kong’s banking regulator, HKMA, has even issued a special circular sent to all financial institutions in the Special Administrative Region of China stating that Hong Kong’s banks have no legal obligation to comply with sanctions imposed by the United States against Chinese and local officials.
Bloomberg cites its own sources in the banking sector in order to show that reality is supposedly different from political statements: “The actions of banks speak about something else. According to Bloomberg News, citing sources familiar with the situation, China’s largest state-owned banks in Hong Kong are taking preliminary steps to comply with the sanctions. Major U.S. banks, including Bank of China Ltd., China Construction Bank Corp., and China Merchants Bank Co., have been cautious in opening new accounts for sanctioned officials, and at least one has suspended such activities.”
One can talk for a long time about the extent to which information of this kind should be trusted, coming from a clearly engaged (at least because of nationality) source and not yet officially confirmed, but in this case, it is not even in the factual basis, but in the very direction of the reasoning of pro-American propaganda. If we simplify and simplify these arguments, they are built on the following chain: Chinese banks are afraid of losing access to work in the U.S. and with American dollars and therefore deny service to high-ranking Chinese officials, and therefore, the “king-dollar” continues to be the actual ruler of the world – with all the ensuing geopolitical and propaganda consequences.
Looks logical – but only at first glance. In the place of American analysts it would be worth not celebrating the victory of the dollar over the Chinese banking system, but to think about the fact that the actions of the Trump administration accelerate de-dollarization, just not directly, but indirectly.
Indeed, as Bloomberg journalists rightly point out, the use of other currencies for transactions is not a panacea, as one Chinese bank, which allegedly violated U.S. sanctions against North Korea and tried to hide these transactions by settlement in other currencies, has found out in its bitter experience. The United States, having been able to trace all bank transfers through the SWIFT international system under the pretext of counter-terrorism since 2001, still sees these transactions and punishes violators. The problem is that, based on this texture, you can draw two opposite conclusions – and one of them will be fundamentally wrong. The conclusion to which American journalists are pushed by the reader is that the rest of the world (and China, among others) will kneel before the United States, realizing that without the dollar and without SWIFT they will not live, and therefore – will have to obey any desires of Washington.
This is the wrong conclusion.
The correct thing is that such actions of the United States are literally forcing Beijing, Moscow, Brussels and so on to realize that either will have to urgently (much faster than it seemed) to develop and distribute its own (alternative SWIFT) systems and currencies for payments, or, if not, Washington will really have to kneel.
This kind of action was taken before the imposition of “Hong Kong sanctions”, but such a profound overhaul of the financial system is always expensive, long and very difficult, not to mention that, apparently, only now in Beijing there was a final disappointment in the issue of Washington’s treaty capacity. The supposed triumph of the “dollar king” about which American journalists write, takes place against the background of significant events, pointing to another, unaltered future. For example, as RT reports, in trade between Russia and China in the first quarter of 2020, the US dollar took less than 50%, falling from the level of 75%, which it was in 2018.
In July, Reuters reported on a breakthrough in the de-dollarization of international oil trade: “This month (British oil company). I’m going to do it. Aug.) BP has delivered three million barrels of Iraqi oil to the Shanghai International Energy Exchange (INE), becoming the first major global trader to deliver physical supply since China launched its futures market in 2018, industry sources said on Tuesday.
Oil on the Shanghai Energy Exchange is traded in yuan, and the success of this trading mechanism contributes to independence from U.S. trading floors and dollar payment schemes for energy. Work is also underway to promote alternative schemes of interbank and commercial payments using the “digital renminbi,” “digital euro” and even specialized cryptocurrencies bypassing SWIFT, with such programs being worked on not only in China but also in the European Union.
The dollar is still really the king of the financial world. But because of Washington’s actions for this king has already accelerated prepared the guillotine.