China Is Preparing to Disconnect from Dollar Payment Systems
OREANDA-NEWS. The authorities of the People’s Republic of China are preparing to disconnect the country from the US dollar payment system. This was stated by Deputy Chairman of the Securities Regulatory Commission of China, Fang Xinghai.
The official meant using the Society for Worldwide Interbank Financial Telecommunications (SWIFT) and the Clearing House Interbank Payments System (CHIPS), which China, like almost the whole world, uses in dollar settlements.
According to Fang Xinghai, China needs to prepare to disconnect from SWIFT and CHIPS in advance. He emphasizes that dependence on dollar payment systems makes the country vulnerable to Washington’s potential sanctions. He also notes that in the future, the US dollar is expected to depreciate, which will negatively affect China, since it has about 2 trillion dollars of non-financial investments abroad.
Fang Xinghai believes that Beijing needs to provide the “internationalization” of the yuan to compensate for external financial pressure. “If our foreign assets were in yuans, there would be no such fears,” he resumed.