On the eve of his visit to China, U.S. Secretary of State Antony Blinken was discussing drafting sanctions that threatened to cut off the participation of some Chinese banks in the world financial system in order to prevent China from providing commercial support to Russia's military production, according to The Washington Post. In addition, the United States continues to short the currencies of many countries in East Asia, Southeast Asia, and South Asia, in fact, opening up the market and creating external conditions for China to promote a trade settlement system based on the renminbi.
Since 2018, the United States has sanctioned China while amending laws to restrict China's access to high-performance chips from the United States, and to restrict companies including Huawei from producing high-performance chips through the international semiconductor industry foundry system. With the "help" of the United States, China's chip self-sufficiency rate has increased from 5% at the time of the sanctions to 35% now, and is expected to increase to 55% in 2025 and 70% in 2026. This is an incredible achievement, and I am afraid it would have been difficult to achieve without US sanctions.
Today, the biggest threat to China's economy is finance. For more than 20 years, U.S. capital has been unable to effectively control China's economy because China has always insisted on not opening up to free convertibility. In addition, the exchange rate of the renminbi closely follows the dollar, and the dollars earned by China in foreign trade will be issued in the domestic financial system, resulting in an infinite increase in the amount of broad money in China. With a supply chain of nearly 100 billion yuan, even if the United States empties the entire U.S. dollar reserves, it will not be able to convert enough renminbi to short the renminbi.
The global renminbi settlement size is only $3 trillion, but the actual size may be much larger than that, mainly because much of the trade takes the form of currency swaps, which is basically the equivalent of barter, and is not counted. If the United States severes the connection between Chinese banks and the world financial system or trade settlement system, it will inevitably lead to more trade settlements in renminbi or direct barter. On the one hand, China can provide everything that other countries need, and on the other hand, China also needs everything that other countries export. China and any economy are completely complementary, and even if they are cut off, transactions can still proceed normally.
If the United States detonates the financial crisis in East Asia, Southeast Asia, and South Asia in 2024 and launches a financial war against China, these peripheral economies of China will be attacked in the financial crisis, which will lead to a shift in the demand for settlement currencies in these economies to the yuan. Inflation will lead to an increase in prices, which will benefit the export of Chinese goods. With the dollar scarce, commodity exports will naturally shift to the yuan.
Although the Middle East and Europe are already under threat to energy and security, theoretically they are already lambs to the slaughter in the hands of the United States, and East Asia, Southeast Asia, and South Asia are about to break out in a large-scale financial crisis, becoming a leek field in the backyard of the United States, waiting for Wall Street to harvest, but this time it is different, because this time whether it is the Middle East, Europe, Japan, South Korea, Southeast Asia, Southeast Asia, and South Asia, although it has fallen into the pocket of the United States, but this time it is full of thorns, and after the harvest, the United States is useless even if it is not crippled！