Transfer of China’s Forex Reserves to West Asia
Transfer of China’s Forex Reserves to West Asia
Concerns about economic condition in the U.S. have made think-tanks in the world to look at the future of the U.S. with a few doubts and uncertainties.

Transfer of China’s Forex Reserves to West Asia

Concerns about economic condition in the U.S. have made think-tanks in the world to look at the future of the U.S. with a few doubts and uncertainties. Huge and unrepayable amount of the U.S. in the condition that the country is facing the Coronavirus pandemic, growing public and national anger towards racism, social gap, and ever-increasing of its isolation on course to pulling out of its global obligations have exacerbated these concerns.


According to reports, the government and non-government debts of the U.S. totaled at 75.28 trillion and if the debts are to be repaid in a period of 10 years, share of each American citizen from the debts will be $227,963 on average and share of each household from the debts would be $900 on average, and since 90 percent of the Americans are grappling with poverty, these debts seem irreparable. The U.S. government debts to the people and countries just equal to one-third of this reported figure and China’s share of these dues is 13.5 percent. So in this declining economic condition in the U.S., it is logical that creditors would think seriously of pulling out their assets from the U.S. By the way, the Republican Party’s policies of administering the country have led to instability and isolation of the country.

The U.S. pullouts of World Health Organization (WHO), the North American Free Trade Agreement (NAFTA), Paris Climate Agreement, Iran’s nuclear deal the JCPOA, and whispers on pulling out of the Open Skies Treaty are all indicators of the U.S. hidden condition and its inability for protecting its hegemonic show-off in the 21st Century. Meanwhile issues like China’s interference in Hong Kong and Taiwan and accusing China of its weak handling of the Coronavirus pandemic have escalated the tension between both countries.

In Hong Kong, the government and China’s Communist Party proposed the national security law and Washington opposed it. In Taiwan, the U.S. has decided to sell the country $18m of Torpedoes which angered China seriously.

The report of Washington’s torpedoes sale came just after Taiwan President Tsai Ing-wen, during her sworn-in ceremony of her second term in office, had emphasized that she would enhance Taiwan’s defense capabilities. In the Coronavirus issue, Washington leaves the WHO unilaterally by accusing the organization of favoring China. Regardless of those issues, the U.S. has seen a mammoth budget deficit this year whose amount has been revealed to be at over $3.31 trillion. So the ratio of the budget deficit to the gross domestic product (GDP) of the U.S. is nearing to 5 to 6 percent of its national domestic product (NDP) this year.

In a period between 1980 to 2019,the U.S.’s worst budget deficit was registered in 2010 which was 9 percent, and its most budget surplus was registered in 2000 with 2.37 percent of its NDP. Currently the major items in the U.S. budget include $1.26 trillion for healthcare, $1.05 trillion for public security, $677b for defense cost and $289.5b for pensions. All major global financial bodies whose managers are even chosen by the U.S. influence have predicted that the U.S. economy will face with minus 7 percent growth.

All these factors and probably some other ones and statistics which have been kept in secret indicate that creditors are thinking of pulling out their capitals and collecting their debts from the U.S. The spokesman of China’s State Administration of Foreign Exchange (SAFE) Ms. Wang Chunying in an interview with China’s official news agency in January emphasized that in the current condition, China due to its robust financial infrastructure does not need immediately to return its forex reserves to China.

So it is natural that due to the economic chaos and uncertainties in the U.S., China and other countries think of saving their assets from the peril and transfer them to their countries. Recently, Iran and China have decided to operationalize a common interests plan worth $400b in the upcoming years. Of course this decision has angered Washington and Tel Aviv. According to the authentic sources, China is also in talks with Iraqi and Syrian governments to boost its bilateral cooperation, and it shows on the whole that China’s future strategic is wisely to transfer its forex reserves to the West Asia because this region enjoys considerable potentials for investment. Except China, other Arab states, which feel concerned about the fate of their capitals and money in the U.S., have implicitly whispered about putting this issue on their agenda.

 By: Hamid Reza Naghashian

  • source : IRAN NEWS