Elephant in the room: Is China planning to control world's economy?
100 percent programmable and trackable, digital Yuan is tied up with China’s drive to control over the world's economy
After trapping several countries in South Asia, Southeast Asia, Africa, Latin America and Europe in its debt diplomacy and taking possession of their sovereign assets as collateral in the event of non-payment of loans, China is now busy planning for economic imperialism by launching digital Yuan.
According to Financial Times, China is keen to become a large economy by introducing digital Yuan before the next year’s Beijing Olympics. The British daily maintains that a new entity, called Finance Gateway Information Services Co, has been assigned with the task of integrating information systems to facilitate the rollout of the digital currency. Other stakeholders, besides People’s Bank of China, include Cross-Border Interbank Payment System (CIPS) which handle trade settlement in Yuan.
It is said that China has already completed the top-level design of the digital Yuan and its testing process in provinces like Chengdu, Shenzhen, Xiongan and Suzhou is on. In a few months, to ensure digital Yuan’s stability and security, the testing process will start in Beijing and other areas of China. Overall, Beijing wants to do it in sync with its design to track all transactional history of an individual in real time and use it to strengthen the surveillance mechanism of the country.
In fact, the project is tied up with the CCP’s drive to maintain control over the world’s economy. As per the Foreign Policy magazine, the digital Yuan is 100 per cent programmable and trackable. That means the CCP can monitor capital flows in great details and impose limitations or preconditions on currency use. However, creating ripples in the international financial corridors is China’s planned move to use ‘E-Yuan’ for trade settlement with countries and the institutions once the digital currency starts gets going in its domestic market.
As per China’s General Administration of Customs, in 2019, the country’s total international trade was $4.6 trillion, which was 12.4 percent of the global trade. In 2020, despite the Covid-19 situation, China’s foreign trade rose 1.5 per cent to $4.65 trillion, a data from the country’s General Administration of Customs showed. In terms of investment, China attracted $163 billion in inflows in 2020, which was $23 billion more in comparison to 2019 when it attracted $140 billion as Foreign Direct Investment. Also, it has invested in trillions across all continents of the world. Besides, it is currently the fifth largest reserve currency of the world. Already, under its Belt and Road Initiative, China is directly involved in infrastructure development in 65 countries.
In view of such a large financial footprint of China, there is a fear that the Xi Jinping regime, which has earned the reputations of being foxy and ruthless, would drag the whole world under its imperialist design once E-Yuan is launched. Moreover what confirms such fear is China’s plan to make E-Yuan, a legal tender, which no merchant can refuse to accept. Merchants or vendors will be obliged to install E-Yuan terminal and payment systems after the currency is formally launched.
Largely, such a move will pose a threat to the economic interests of the US, Japan, India, Europe and their allies. “The digital Yuan will help China internationalize its currency, promoting the Yuan as a rival or alternative to the US dollar; enable China to expand and export its surveillance capabilities by providing a window into and control over the economic activity of users within its border or abroad,” the Foreign Policy magazine said in its detailed analysis on China’s currency’s design.
Worse, what worries people the most is that digital Yuan will allow China, in the event of imposition of any sanction on it on account of human rights violations or armed aggression against any country, to circumvent sanctions, armed embargoes and money laundering regulations. It is argued that the digital Yuan’s strong encryption may make it practically impossible for others, including foreign intelligence organizations to trace transactions. Clearly, China, known for its perverse behaviour, is trying its best to foist its’ kind of order in the world and all this, with an intention to lord over it. But will any of such plans ever meet its logical end?