The economic advisor for “Zhongnanhai”, the pinnacle of the CCP’s power, sends a warning: the United States can seize our overseas assets!
Yu Yongding, an important adviser to Zhongnanhai, warned that the United States can sanction Chinese banks and also seize Chinese overseas assets if financial disputes between China and the US drag on.
One possible scenario is that the United States imposes sanctions on the Bank of China, just like the financial sanction imposed on the Kunlun Bank, a Chinese regional lender backed by China’s state-owned oil company, and Iran in 2012.
However, banning Chinese banks from dealing with the US financial system is just one of many ways the US could inflict pain on the CCP in the financial sector, said Yu Yongding, a former adviser to the People’s Bank of China.
“Financial sanctions can take many forms, targeting banks or certain industries.” Yu Yongding said that the United States can seize China’s overseas assets if conflict breaks out, “Do not rule out this possibility. It is really hard for us to predict what will happen next.”
His warning reflects the growing concerns of Chinese researchers and officials about a full-scale “financial war” between the CCP and the United States. Many people said that the U.S. has the upper hand because of the U.S. dollar’s leading role in cross-border investment and payment.
Last week, the Trump administration sanctioned 11 mainland and Hong Kong officials, including Hong Kong Chief Executive Carrie Lam, for their role in the alleged erosion of Hong Kong’s autonomy.
The risk of Chinese banks being sanctioned by the United States is becoming greater and greater. The financial institutions that deal with these people may be seen by Washington as violating sanctions.
Bloomberg reported on Wednesday that even Chinese state-owned banks with operations in Hong Kong have begun to review their relationships with these people in the US sanction list to manage risks.
Yu Yongding stated that China faces “a series of threats from the United States” in terms of financial restrictions.
For example, when Kunlun Bank was sanctioned by the US Treasury Department for financing Iran’s oil transportation, the bank was cut off from the U.S. dollar payment system, thereby restricting its cross-border business.
“Such sanctions have been used before,” Yu Yongding said. “The U.S. can continue to use them in the future. We must be very careful.” In addition, he said that Washington can “blackmail” Chinese banks by imposing huge fines to make them obey U.S. requirements.
He is not the only one predicting such financial crisis.
Although the People’s Bank of China has remained largely silent, this is a heated debate among Chinese economists and analysts who are considering whether the US can use the Clearing House Interbank Payment System (Chips) and global The Interbank Financial Telecommunications Association (Swift) is trying to get China out of the dollar system.
Yu Yongding said that Beijing’s options are limited and it must prepare for the worst.
At the same time, the U.S. government is not ready to take such extreme measures. Yu Yongding stated that China’s “dual circulation” strategy, which focuses on the domestic market and hedges against the adverse external environment, is the right choice for financial decoupling and sanctions risks. “In the long run, this adjustment will be greatly enhanced. China’s financial security will minimize the losses of the US financial war,” Yu Yongding said.