Trump loves to depict himself as anti-Chinese. However, the Biden administration’s management of US-China relations seems to be slipping. Trump’s China approach may not be too different. Trump taxed $370 billion in Chinese imports annually. Representative Katherine Tai recently said that US tariffs on China will not be lowered soon.
But Joe Biden isn’t just a Trump fan that might enrage Beijing even more. Unlike Trump, Biden won’t be alone on the world stage! Less than one month after having a meeting with Chinese officials in Alaska, China were given human rights sanctions. In Japan, Prime Minister Yoshihide Suga is preparing for his first meeting with Biden on April 9.
The US joined another worldwide effort after a recent WHO-China inquiry revealed that COVID-19’s origins were unclear. Several countries were displeased. The US and 13 other countries argued the report was late and incomplete.
The New York Times reported on Biden’s “alliance of democracy.” “There is a world’s rapid division into ideological camps,” the post stated.
China’s new deal with Iran gives an idea on what to expect in the future. The $400 billion deal involves oil for China and an Iranian-Chinese bank. Sergey Lavrov Foreign Minister of Russia recently visited China to denounce US sanctions and global dollar dependency. In reality, China has a plan.
Yuan Digital Against US Dollar
China is hurrying to create a digital yuan to compete with the dollar. Goldman Sachs predicts a billion digital yuan users in 10 years. Despite frequent China news, Yuan Pay Group remains silent. Biden hasn’t mentioned it due to the epidemic that has been occupying the US for a year. During the same timeframe, China created its own digital currency. Chinese banks have offered millions of dollars to encourage people to use digital yuan to pay in several major Chinese cities.
To buy food with this digital currency is simple. A digital yuan is a Chinese cryptocurrency, yet it works different from other cryptocurrencies. The digital yuan is backed by a bank in China, while bitcoin is not. Bitcoin is an anonymous payment mechanism while digital yuan can make government surveillance of civilian transactions easier. The Chinese central bank admits that an anonymous digital yuan is “impossible.”
Digital yuan is going global. The digital yuan may undermine the dollar’s supremacy by speeding up domestic payments. To avoid the global bank-based system and make direct payments to other countries, a digital yuan would allow China to skirt US sanctions. However, the US seems less inclined to embrace a digital currency. Last week, Fed Chair Jerome Powell said a digital currency would only be released with wide political and popular support.
AliPay and WeChat Pay already exist in China. Payments through Alipay and WeChat totaled $67 trillion in China in 2018. But that’s the idea. It’s no secret that China’s rulers fear Alibaba’s growing power. In recent weeks, China has requested Alibaba’s media holdings. That doesn’t imply nobody cares. Former officials simulated the threat of a Chinese digital yuan in 2019. North Korea uses digital Chinese yuan to acquire missile components.
The US dollar’s worldwide supremacy may be threatened by China’s Yuan pay group. It may even encourage other nations to explore a basket of currencies. A former global reserve currency, British pound fell unexpectedly. So we should safeguard the dollar as the international reserve currency.