China owes its soaring economic success to massive Western cash inflows. Now China is facing a tough reality. Its economy is about to relapse to the state before the economic boom. Factories built by foreign companies ensure the lion’s share of jobs for local people. Besides, overseas investment, technologies, and sales markets for China-made consumer goods create perfect conditions in the country for boosting its economy. To pay homage to China’s authorities, they took full advantage of the Western involvement in their affairs and impressed the world with staggering two-digit figures of the gross domestic product. Having stretched its wings, China skyrocketed to the rank of the world’s second-largest economy after the US. However, Beijing felt the intoxication of success, crediting the economic boom entirely to its merit.
In fact, ungratefulness is a bad manner as China downplays the Western contribution to its success. Meanwhile, Beijing thinks there is nothing wrong with breaching valid agreements and pushing ahead with its own ambitions. The government claims that one of its major goals is to squeeze the US currency out of the domestic financial sector. The first step in de-dollarization is scrapping payment systems pegged to the US currency. Interestingly, the underlying reason behind this campaign is that the White House threatens to cut off Chinese companies and banks from the US dollar-based payment systems like SWIFT and CHIPS. So, de-dollarization is not a bold move but a precautionary measure in the face of the looming US sanctions. Fang Xinghai, a Vice Chairman at the Securities Regulatory Commission, confirmed that China mainly depends on pro-American payment systems in international deals. This practice makes China’s economy vulnerable to US sanctions. “We have to make preparations early – real preparations, not just psychological preparations,” Fang said at a forum. In other words, Beijing has to adjust its banks and firms for a new reality.
Recently, Washington passed the legislative bill which authorizes US lawmakers to impose sanctions on China on their own without consent from other agencies. Last but not least, the US is not the only one who has a grudge against China. The EU also aims to revise its relations with Beijing.