The United States is starting to behave again!
It is reported that the United States is being drafted sanctions that may cut off some Chinese banks from the global financial system.
The United States has kicked Russia out of the International Settlement System (SWIFT) before, and now the same routine is going to be applied to us.
In this regard, some people are frightened, worried that after China is kicked out, not only will there be no foreign trade, but even if you go to Thailand, you will have to find a black market to exchange currency.
So, is this really the case?
The U.S. kicked China out of the settlement system
At present, almost all cross-border settlements of global banking institutions are completed through the International Settlement System (SWIFT).
SWIFT covers more than 11,000 financial institutions in more than 200 countries and regions around the world, processes up to 42 million pieces of financial information every day, and allocates trillions of dollars.
It can be said that almost all the important financial institutions in the world are members of SWIFT.
It is worth mentioning that SWIFT does not directly process the transfer of funds, but rather transmits payment instructions, i.e. financial messages.
It can be simply understood as telling member banks who transferred money to you and who you should transfer, focusing on the function of information interaction.
For example, if a U.S. bank needs to transfer money to a German bank, the U.S. bank will send a message with payment details to the German bank via SWIFT.
Once the German bank confirms this instruction, it receives the funds from its correspondent bank in the United States and then credits it to the account of the ultimate recipient.
While SWIFT itself is a politically neutral international organization, the system is maintained and managed by the United States.
The Bank for International Settlements does not have direct jurisdiction over SWIFT and has a difficult time interfering in U.S. decision-making.
In other words, SWIFT is basically the Americans who have the final say.
No way, because in the international market, most cross-border payments are settled in large amounts using US dollars, and the share of US dollars is the highest.
This gives the United States a bargaining chip to show off its military might, and threatens to kick any country out of the SWIFT system when it sees it unhappy.
Once kicked out, the country will lose its main channel for cross-border payments and information transfer with other financial institutions, which will greatly hinder its international transactions and capital flows.
To put it more figuratively, SWIFT is the "house number" of each bank in the global village.
Without SWIFT, your company is a "black account" without an "account" in international business, which is equivalent to being deprived of the right and ability to conduct international transactions.
Previously, after Iran was kicked out of the dollar payment system by the United States, the Iranian dollar turned into waste paper overnight, and no one picked it up on the street.
Iran's foreign trade has fallen into recession, the scale of imports and exports has fallen sharply, and the volume of crude oil exports has been cut by half.
During the Russia-Ukraine conflict, the United States kicked Russia out of the SWIFT system in the same way, involving 10 of Russia's largest financial institutions, whose assets account for nearly 80% of the total assets of Russia's banking industry.
Therefore, for Russia, it can be called a "financial nuclear bomb" level of lethality.
How China responded
Because of this, some people are worried that once China is also kicked out of SWIFT, will it "return to the pre-liberation period overnight"?
First of all, the Americans did not dare to do this.
You must know that China is the world's largest trading country, the world's second economy, and the manufacturing industry chain is also the most complete, and its importance to the global economy is self-evident.
It is no exaggeration to say that if China withdraws from SWIFT, the dollar will collapse directly.
The so-called trading system is dependent on the currency generated by the transaction, and the currency that can be bought is the real currency.
Secondly, even if the Americans are very hard-headed and insist on doing this, it's okay!
Because China has long had a Plan B plan.
For example, China's CIPS (Cross-border Renminbi Payment System), launched in 2012, can use RMB for direct settlement, without the need to open correspondent bank accounts, and can also reduce transfer fees and time, which is undoubtedly a confrontation with the US dollar.
It is widely believed in the industry that the establishment of CIPS will further promote the global use of the renminbi while responding to market demand, paving the way for it to become a truly global currency.
In 2022, the system has handled a total of 4,400,400 cross-border RMB transactions, amounting to 96.70 trillion yuan, an increase of 31.68% and 21.48% year-on-year, respectively.
According to the SWIFT research report, in 2022, the RMB will remain third in the global cross-border trade currency ranking, accounting for 3.91%, nearly twice that of 2021, and the RMB will remain fifth in the global payment currency ranking.
As of the end of 2022, the CIPS system has a total of 1,366 participants, including 79 direct participants and 1,287 indirect participants, covering 107 countries and regions around the world.
And more importantly, the biggest difference between CIPS and SWIFT is that it has both settlement functions and message information transmission functions, and it is mainly "RMB cross-border settlement".
This move will not only help promote the use and acceptance of RMB around the world, but also help break the existing international financial monopoly system.
Especially in the field of international payments, the dependence on the dollar in the Western financial system has been reduced.
By the way, after Russia was kicked out of SWIFT by Europe and the United States, Russia decided to use the local version of the Financial Information Transmission System (SPFS) for domestic payments, while China's CIPS was used abroad.
After joining the CIPS system, the processing time of cross-border RMB business in Russia in China will be shortened and the settlement speed will be accelerated.
At the same time, a number of Russian financial institutions have also confirmed that the popularity of RMB in the international settlement of Russian enterprises is on the rise.
By the end of 2022, the proportion of settlement in RMB had risen to 65% and continued to increase.
Relevant data shows that in the first eight months of 2021, the average monthly settlement amount of CIPS was as high as 6.375 trillion yuan (about 1 trillion US dollars).
Russia's total import and export volume in 2021 will be 789.4 billion US dollars, which means that CIPS is basically enough to meet Russia's global trade settlement needs.
In a sense, CIPS has undoubtedly saved the Russian economy.
Therefore, if the United States really insists on going its own way, then it will undoubtedly give China a "divine assist", and CIPS will replace SWIFT just around the corner.
In general, in order for China's financial and banking industries to not be constrained by the United States in economic globalization, CIPS is the best choice.
end
To put it bluntly, no matter whether the United States uses money blackmail or nuclear blackmail, it is just a paper tiger.
Although China's CIPS is not as large as SWIFT in terms of quantity and scale, there is an old saying: "A spark can start a prairie fire", and it is very suitable to be placed here.
Think about the end result when we were kicked out of the ISS project and didn't sell us high-end chips?
Therefore, even if the United States makes a stumbling block on China at every turn, it will not be able to stop our development at all.
The world has been bitter for a long time, and the West's set of monopoly rules, it's time to adapt to the development of the times, who can compete with the general trend?