Budapest Post

Cum Deo pro Patria et Libertate
Budapest, Europe and world news

US financial sanctions against China ‘suicidal’ for Washington, scholar says

US financial sanctions against China ‘suicidal’ for Washington, scholar says

The Trump administration must issue a report to the US Congress on Monday in a follow up to July’s Hong Kong Autonomy Act, but former Chongqing mayor Huang Qifan believes the economic and financial links between China and the US are too valuable.


Former Chongqing mayor Huang Qifan is now a deputy head of the China Centre for International Economic Exchanges, a Beijing-based think tank.

The United States is unlikely to launch a financial war against China as it would hurt itself more, outspoken former Chongqing mayor Huang Qifan said.

“Don’t worry, everybody. If the US really decouples from us in the financial realm, it will hurt us by 1,000 but hurt themselves by 2,000, which equals a suicidal attempt and the US will die even before we do,” Huang said in comments published at the weekend.

His comments came as the Trump administration is facing a deadline on Monday to identify individuals who facilitated the “erosion” of Hong Kong’s autonomy, with a report due to be issued to the US Congress 90 days after the Hong Kong Autonomy Act was passed in July.

There are also concerns that the US may resort to broad financial sanctions against China by cutting its access to US dollars, which remains the dominant currency in international trade and payments.

The US has, according to Huang, succeeded in bullying economies like Russia,Southeast Asia and South Korea by wielding its financial power stemming from the anchor currency role of the US dollar, but he believes that this tactic “will not work for China”.

China has three “magic weapons” to shield itself from any potential financial sanctions by the US, namely that capital flows into and out of China are highly restricted, that foreign ownership of assets in China’s financial system remains small, as well as Beijing’s extensive oversight of financial operations, Huang explained.

“If the three areas are fully open, they will be controlled by the US, which will make it easy for the US to subvert us. These three areas of China are not open, or there is limited access under the jurisdiction of our system, and that makes it hard for the US to subvert us,” added Huang, who is now a deputy head of the China Centre for International Economic Exchanges, a Beijing-based think tank.

China’s economic and financial links with the US are, therefore, too valuable for the US business community and investment banks for Washington to cut despite attempts by politicians to decouple the world’s two largest economies.

“The king for Wall Street is the market. Wall Street listens to the capital and financial market, not [US President Donald] Trump. Trump has no rights or authority to order Wall Street or the US business community to go against China. He just creates noises,” Huang told a conference organised by the Chinese Association of Small and Medium Enterprises on Friday.

Guan Tao, a former official with the State Administration of Foreign Exchange, previously said that it was an “extremely small probability event” that the US would kick China out of the SWIFT international payments messaging system.

“The United States cannot ultimately decide whether a country can use SWIFT or not unless there is consensus by other members for a joint sanction, and that will depend on the extent of the country’s economic and trade links with the world. The US attempt to block Russia from SWIFT has been unsuccessful,” Guan, who is now the chief economist for the brokerage arm of the Bank of China, said in a recent interview with Chinese media.

He added that it was unlikely that the US would cut all Chinese institutions from the US dollar payment system, namely the Clearing House Interbank Payments System (CHIPS), with the probability for the US to block China from SWIFT even smaller.

But Guan added that it was still possible that the US would pick a few individual Chinese institutions to punish by limiting their access to CHIPS or SWIFT.

AI Disclaimer: An advanced artificial intelligence (AI) system generated the content of this page on its own. This innovative technology conducts extensive research from a variety of reliable sources, performs rigorous fact-checking and verification, cleans up and balances biased or manipulated content, and presents a minimal factual summary that is just enough yet essential for you to function as an informed and educated citizen. Please keep in mind, however, that this system is an evolving technology, and as a result, the article may contain accidental inaccuracies or errors. We urge you to help us improve our site by reporting any inaccuracies you find using the "Contact Us" link at the bottom of this page. Your helpful feedback helps us improve our system and deliver more precise content. When you find an article of interest here, please look for the full and extensive coverage of this topic in traditional news sources, as they are written by professional journalists that we try to support, not replace. We appreciate your understanding and assistance.
Newsletter

Related Articles

0:00
0:00
Close
16 Billion Login Credentials Leaked in Unprecedented Cybersecurity Breach
Senate hearing on who was 'really running' Biden White House kicks off
Hungary Ranked Among the World’s Safest Travel Destinations for 2025
G7 Leaders Fail to Reach Consensus on Key Global Issues
FBI and Senate Investigate Allegations of Chinese Plot to Influence the 2020 Election in Biden’s Favor Using Fake U.S. Driver’s Licenses
Trump Demands Iran's Unconditional Surrender Amid Escalating Conflict
Shock Within Iran’s Leadership: Khamenei’s Failed Plan to Launch 1,000 Missiles Against Israel
Wreck of $17 Billion San José Galleon Identified Off Colombia After 300 Years
Man Convicted of Fraud After Booking Over 120 Free Flights Posing as Flight Attendant
Iran Launches Extensive Missile Attack on Israel Following Israeli Strikes on Nuclear Sites
Beata Thunberg Rebrands as Beata Ernman Amidst Sister's Activism Controversy
Hungarian Parliament Approves Citizenship Suspension Law
Prime Minister Orbán Criticizes EU's Ukraine Accession Plans
Hungarian Delicacies Introduced to Japanese Market
Hungary's Industrial Output Rises Amid Battery Sector Slump
President Sulyok Celebrates 15 Years of Hungarian Unity Efforts
Hungary's Szeleczki Shines at World Judo Championships
Visegrád Construction Trends Diverge as Hungary Lags
Hungary Hosts National Quantum Technology Workshop
Hungarian Animation Featured at Annecy Festival
Israel Issues Ultimatum to Iran Over Potential Retaliation and Nuclear Facilities
UK and EU Reach New Economic Agreement
Coinbase CEO Warns Bitcoin Could Supplant US Dollar Amid Mounting National Debt
Trump to Iran: Make a Deal — Sign or Die
Operation "Like a Lion": Israel Strikes Iran in Unprecedented Offensive
Israel Launches 'Operation Rising Lion' Targeting Iranian Nuclear and Military Sites
UK and EU Reach Agreement on Gibraltar's Schengen Integration
Israeli Finance Minister Imposes Banking Penalties on Palestinians
U.S. Inflation Rises to 2.4% in May Amid Trade Tensions
Trump's Policies Prompt Decline in Chinese Student Enrollment in U.S.
Global Oceans Near Record Temperatures as CO₂ Levels Climb
Trump Announces U.S.-China Trade Deal Covering Rare Earths
Smuggled U.S. Fuel Funds Mexican Cartels Amid Crackdown
Austrian School Shooting Leaves Nine Dead in Graz
Bezos's Lavish Venice Wedding Sparks Local Protests
Europe Prepares for Historic Lunar Rover Landing
Italian Parents Seek Therapy Amid Lengthy School Holidays
British Fishing Vessel Seized by France Fined €30,000
Dutch Government Collapses Amid Migration Policy Dispute
UK Commits to 3.5% GDP Defence Spending Under NATO Pressure
Germany Moves to Expedite Migrant Deportations
US Urges UK to Raise Defence Spending to 5% of GDP
Israeli Forces Intercept Gaza-Bound Aid Vessel Carrying Greta Thunberg
IMF Warns of Severe Global Trade War Impacts on Emerging Markets
Low Turnout Jeopardizes Italy's Citizenship Reform Referendum
Transatlantic Interest Rate Divergence Widens as Trump Pressures Powell
EU Lawmaker Calls for Broader Exemptions in Supply Chain Legislation
France's Defense Spending Plans Threatened by High National Debt
European Small-Cap Stocks Outperform U.S. Rivals Amid Growth Revival
Switzerland Proposes $26 Billion Capital Increase for UBS
×