Will the U.S. Defalcate China’s Money?

In nearly past six months since the outbreak of the Coronavirus in China and ultimately its spread in most countries in the world, the U.S. has tried to make a big excuse against China and to lay a ground for an economic war. The U.S.’s challenging pretext in facing with the World Health Organization (WHO) has itself laid the ground for this excuse making.

IRAN NEWS POLITICAL DESK

According to the official statement of the spokesman of China’s State Administration of Foreign Exchange (SAFE) during an interview with Chinese news agency Xinhua, China’s foreign exchange reserves, either in form of securities or cash, in the American banks rose to nearly $3.115 trillion and during the Coronavirus pandemic the figure has increased by 0.02 percent.

The SAFE spokeswoman Wang Chunying in her interview has emphasized that in the current condition, China, due to its robust financial infrastructures, does not need its reserves in the U.S. banks and to some extent she signaled a peace message to Washington, and in her message she revealed the policy of waiting for the fate of the U.S.’s November election in order to show with whom China is to challenge in the White House.

It is interesting that despite decline in exports of China and trade war with the U.S., China’s forex reserves has been seen uptrend in June and according to the SAFE spokesman, China’s foreign exchange reserves rose 0.03 percent in June comparing to January and reached $3.115 trillion.

The Chinese official also said although global political and economic uncertainties are rising, Chinese monetary authority remained optimistic about stable foreign exchange reserves in the future, supported by economic growth within a reasonable range.

Economic analysts believe the increase in China’s forex reserves in the U.S. is because of change in the forex market relations, and they also believe the rise in China’s forex reserves has happened due to different factors like par of exchange rate and changes in the price of the assets.

These kinds of analyses also point to the concerns in the wake of the virus pandemic and its impact on the China’s financial market and East Asian region as well as global events like the BREXIT, and they believe the current economic condition in Europe and the U.S. have caused concern for the White House regarding radical forex decisions.

Perhaps Ms. Wang’s remarks in the interview may have been also some kind of assurance to the White House for alleviating the concerns and reducing tensions. Political experts in the U.S. believe that U.S. President Donald Trump is seeking a political war and even a military clash with China in order to pave the ground for defalcating China’s forex reserves under such a climate and condition. In the past six months, there have been several excuse makings which have intensified the tension between Beijing and Washington. Issues like the U.S. interference in the effective policies in Taiwan, criticizing the security law in Hong Kong and above all , accusing China of its intentional passiveness  in dealing with the Coronavirus and ultimately spreading the virus to the U.S. were of major excuses made by the U.S.

It is interesting that simultaneously with threatening China,Trump accuses Russia, which is one of the world super powers, of violating the open sky treaty. Creating simultaneous hostility with China and Russia can be considered as the doctrine of Cold War and freezing the reserves of the both countries in the current economic turbulence in the U.S.

The U.S. has shown this experience to the world when it is at odd with any country on any pretext, it freezes its forex accounts in its banks. The best proof for this claim is freezing Iran’s accounts and assets in American banks after the victory of the Islamic Revolution and overthrown of Mohammad Reza Shah, the U.S. lackey in Iran.

 By: Hamid Reza Naghashian