6.5 C
New York
Friday, December 4, 2020

Economic checkmate: how could China be responding to the US for sanctions?

Must Read

Is it true that being glued to the phone is bad for your mental health?

Do you spend a lot of time using your mobile phone? Don't worry, it won't have an effect on your...

Scientists explain the significance of the oldest sculptures on Earth

The statuettes of "Venus Figurines" personify the ideas of ancient people about the ideal female figure. Scientists from the United...

Astronomers catalog a million unknown galaxies and you can now take a virtual trip through them

Astronomers have cataloged a million previously unexplored galaxies using a radio telescope. The high-resolution images obtained were put together in...
Manish Saini
Manish works as a Journalist and writer at Revyuh.com. He has studied Political Science and graduated from Delhi University. He is a Political engineer, fascinated by politics, and traditional businesses. He is also attached to many NGO's in the country and helping poor children to get the basic education. Email: Manish (at) revyuh (dot) com

China may be accelerating the diversification of its foreign exchange reserves from dollar assets in response to Washington, according to analysts consulted by the South China Morning Post.

According to some analysts, this could be happening in response to possible US financial sanctions, although they assure that there are clear limits on how far one can go in a possible push for de-dollarization.

Beijing reportedly reduced its holdings of US debt bonds for a quarter to $ 1.07 trillion at the end of August. This would be the lowest level since March 2017, according to published SCMP citing data from the Department of the US Treasury.

While China’s State Foreign Exchange Administration (SAFE), in its annual report, states that U.S. dollar assets accounted for 58% of reserves in 2015 or 1.8 trillion of China’s total reserves of about $3.14 trillion.

Thus, experts estimate that China could be increasing the diversification of its reserves from April to July, that is, about 3.6 times more than a year ago.

The chairman of the China Forex Investment Research think tank, Tan Yaling, assures that the changes recorded in China’s foreign reserves were part of “a diversification process” that was underway years ago by the foreign exchange regulator and considers that “a radical approach to dedolarization should not be taken because it would be of no use.”

In turn, He Qing from Renmin University of China considers a scenario that could cause negative effects on the exchange rate and investments.

“If China’s access to the US dollar is restricted, it would affect China’s foreign investment, foreign exchange reserve operations and lead to greater fluctuations in the yuan exchange rate in the short term,” he explained.

Other analysts believe that the dollar is losing prominence among international payments.

The dean of the Chongyang Institute of Financial Studies, Wang Wen, concluded that the monetary easing of the US Federal Reserve undermines confidence in the dollar as the main currency in the world.

Last September, Global Times analysts warned that Beijing could cut its holdings of US bonds to about $ 800 billion from a level of more than $ 1 trillion.

Frictions between the US and China have led the Asian giant to seek independence from the dollar through the internationalization of its national currency. The yuan has also strengthened through the accumulation of gold reserves and its use in trade with international partners.

- Advertisement -
- Advertisement -

Latest News

Is it true that being glued to the phone is bad for your mental health?

Do you spend a lot of time using your mobile phone? Don't worry, it won't have an effect on your...

Scientists explain the significance of the oldest sculptures on Earth

The statuettes of "Venus Figurines" personify the ideas of ancient people about the ideal female figure. Scientists from the United States and the United Arab...

Astronomers catalog a million unknown galaxies and you can now take a virtual trip through them

Astronomers have cataloged a million previously unexplored galaxies using a radio telescope. The high-resolution images obtained were put together in an impressive celestial world map...

The iOS, more vulnerable than ever: an iPhone could have been hacked over Wi-Fi

A cybersecurity expert finds an unprecedented vulnerability on iOS operating system devices. Until May 2020 the 'hackers' may have accessed iPhones, iPads and iWatch...

German workers’ union declares war on Tesla

In Germany, the largest metalworkers union, IG Metall, declared war on Tesla co-founder Elon Musk who is building his first European plant in the...
- Advertisement -

More Articles Like This

- Advertisement -