The United States is looking to reduce or maybe completely cut off Chinese access to the US dollar system Swift. According to the South China Morning Post, this has sent a message to Beijing and made the officers uneasy about the chances of a financial war with Washington.
Swift or the Society for Worldwide Interbank Financial Telecommunication is a network established for the use of worldwide banks in sending and receiving information about financial transactions. It is one of the fragments of the infrastructure that has underpinned the US dollar’s role or importance in the international trade and investment market. International banks maintain their relationships with US banks and conduct US dollar transactions. Due to this payment system, US banks can restrict transactions with any particular individual, institution, or country. This gives them the strength to deny anyone’s access to the US dollar payment system.
China’s Communist Party (CCP) is pretty much tensed over this fact and the future due to the growing international lashes against it over Hong Kong and Xinjiang. However, some have spoken positively to soothe the fear.
Some officials and political experts who support CCP have stated that the United States will not be taking such drastic steps regarding its relationship with China as it has with North Korea and Iran as this step will pose some threats to the US as well as the global economy.
However, it cannot be denied that China is under some risk as the US could make use of the hegemony of its dollar to attack Beijing if the relationship between the countries continues to worsen over time.
This has raised debates over the fact of the US announcing sanctions on the Chinese entities and officials due to the human rights violations in Uighur-populated Xinjiang and undermining the autonomy of Hong Kong.
Michael Pompeo, the US Secretary of State recently announced that visa sanctions on some employees of the Chinese technology companies such as Huawei provide material support to entities that support human rights abuses on a global scale.
Earlier, visa restrictions were imposed on some Chinese officials under the Reciprocal Access to Tibet Act, 2018.
On July 7, Pompeo had announced: ‘Today I am announcing visa restrictions on PRC government and Chinese Communist Party officials determined to be ‘substantially involved in the formulation or execution of policies related to access for foreigners to Tibetan areas,’ pursuant to the Reciprocal Access to Tibet Act of 2018.’
The US had also announced about ending its defense equipment export to Hong Kong. It was announced after China’s imposition of national security law in the city.