- Analysts and officials continue to say it is highly unlikely United States will cut off China or Hong Kong from US dollar payment system Swift
- The issue is seen as a major threat to not only China’s future economic development, but also to world peace
Debates continue among Chinese officials and analysts as to whether the United States has the ability and willingness to reduce or even completely cut off China’s access to the US dollar system, reflecting a sense of uneasiness in Beijing about the potential ramifications of a financial war with Washington.
The general consensus, according to published reports and views, is that Washington will not go to this extreme, as it has with Iran and North Korea, because of the risks that such a drastic move would pose to the US itself and to the global economy.However, for China, the risk remains real that the US could use the US dollar’s hegemony to inflict pain on China if relations continue to deteriorate.
Washington has already announced that it will penalise individuals involved in undermining Hong Kong’s autonomy and punish Chinese financial institutions that continue to do business with them – a relatively targeted approach to financial sanctions. A big question is whether these sanctions could escalate.