In today's globalized world, the smooth operation of international trade and finance is inseparable from the international payment system. Among them, SWIFT (Society for Worldwide Interbank Financial Telecommunication) plays a vital role as the world's most important financial information transmission network. But what would it mean if China were kicked out of the system?
First, the inability to settle China's goods exports in dollars will encourage more countries to turn to the renminbi or gold for trading. This will greatly increase the demand for the renminbi and promote the renminbi's rise in the global monetary system. As the internationalization of the renminbi accelerates, the global monetary system is likely to undergo a major overhaul.
Second, China's kicking out of the SWIFT system will accelerate the pace of de-dollarization of the world. As the world's largest economic and trade power, China occupies a pivotal position in global trade. If countries can only use the renminbi in trade with China, the share of the US dollar in global trade will gradually shrink, and de-dollarization will enter the fast lane. This will allow for a more diversified global monetary system and less reliance on a single currency.
However, this change will also bring an increase in the cost of living in most countries around the world. Goods made in China are loved by consumers around the world for their high quality and low price. Losing goods made in China will have to look for alternatives, which tend to be more expensive, leading to a significant increase in the cost of living. In addition, the loss of cheap goods made in China will also exacerbate inflationary pressures and bring instability to the global economy.
In addition, we should also note that history has proven that leaving the dollar does not mean stagnation. Taking Russia as an example, after being kicked out of the SWIFT system by the United States, Russia decisively abandoned the dollar and used rubles, yuan and other currencies for settlement. After years of hard work, the Russian economy achieved the feat of $13,600 per capita GDP in 2023, an increase of 33% compared to 2020. This achievement fully proves that in the context of globalization, any country has the ability to cope with external challenges and achieve sustainable economic development through independent innovation, openness and cooperation.
For China, in the face of the risk of being kicked out of the SWIFT system, it should actively promote the internationalization of the RMB, strengthen economic and trade cooperation with other countries, and promote the diversification of the global trading system. At the same time, China should also strengthen independent innovation and improve its independent research and development capabilities in core technologies to cope with possible external pressures.
If China were kicked out of the SWIFT system, it would have far-reaching consequences for the global economy. However, it will also be an important opportunity to promote changes in the global monetary system and accelerate the process of de-dollarization. In the face of challenges and opportunities, all countries should work together to promote the stability and prosperity of the global economy.
In the future, China's position in the global economy will be more solid, and the internationalization of the renminbi will continue to accelerate. At the same time, the global monetary system will be more diversified, and countries will pay more attention to independent innovation and win-win cooperation. In this process, China will play a more important role and make positive contributions to promoting the sustainable development of the global economy.
Faced with the risk of being kicked out of the SWIFT system, China should maintain its strategic focus, firmly promote reform and opening up, strengthen economic and trade cooperation with other countries, and jointly build an open world economy. At the same time, China should also strengthen independent innovation and improve its independent research and development capabilities in core technologies to cope with possible external pressures. In today's globalized world, no country can stand alone, and only by strengthening cooperation and seeking common development can we achieve common prosperity.
Finally, we should recognize that China, as a responsible major country, plays an important role in global economic governance. In the future, China will continue to uphold the concept of openness, cooperation and win-win results, and promote global economic stability and prosperity. At the same time, China will actively participate in the reform of the global governance system and contribute its wisdom and solutions to building a more just, rational and effective new international economic order.
In short, if China is kicked out of the SWIFT system, it will have a profound impact on the global economy, but it will also be an important opportunity to promote the reform of the global monetary system and accelerate the process of de-dollarization. In this process, China will maintain its strategic focus, firmly promote reform and opening up, strengthen economic and trade cooperation with other countries, and jointly build an open world economy. At the same time, China will actively participate in the reform of the global governance system and contribute its wisdom and solutions to building a more just, rational and effective new international economic order.