Zhou Li, an official of the Chinese Communist Party (CCP), calculated that the dollar constitutes “a great risk” for China’s economy, and proposes strategies to avoid the possible ruin of its economic system.
The growing friction between the two world giant economies, the United States and the Chinese Communist Party, is gradually approaching a point of no return that may involve the creation of two independent market blocks, said Li, according to the South China Morning Post.
“By taking advantage of the dollar’s global monopoly position in the financial sector, the U.S. will pose an increasingly serious threat to China’s [the CCP’s] future development,” Li wrote. He added “The U.S. dollar could become a major risk ‘grabbing us by the throat.'”
The Chinese Communist Party (CCP) would be in default of initiating the gradual decoupling of the yuan from the influence exercised by the dollar and its internationalization.
Li, former deputy director of the Communist Party’s International Liaison Department—which manages relations with foreign political parties, organizations, and elites.
These warnings come amid progress on U.S. sanctions against CCP officials and financial firms involved in the repression of Hong Kong with the new national security law.
In addition, Hong Kong’s Home Rule Act allows for the punishment of foreign banks if they do business with sanctioned officials, even excluding them from access to the global dollar payment system.
Li called attention to the Federal Reserve’s unlimited quantitative easing program that could cause the devaluation of dollar assets held by financial institutions, companies, and individuals of the CCP.
The substantial investments of the Chinese Communist Party in dollars are taken into account by Li when presenting his economic strategy.
The CCP-dependent economy has more than $2 trillion in overseas investments, plus $1.07 trillion in U.S. Treasury securities as part of its $3 trillion foreign exchange reserves.
With his proposals, Li agrees with Fang Xinghai, vice chairman of the China Securities Regulatory Commission, who believes in the need to untie the two currencies.
“The internationalization of the yuan is a necessity to offset external financial pressure,” Fang said, according to the South China Morning Post.
“In particular, it is necessary at this time to monitor the risk that the U.S. will demand compensation from China [for the damage caused by the CCP virus pandemic],” Li said this time.
Indeed, the scale of the damage caused worldwide by the CCP Virus is so great that as recently as July 14 President Donald Trump spoke of the CCP’s responsibility in this regard.
“Make no mistake about it. We believe that China is totally responsible for concealing the virus and unleashing it on the world. They could have stopped it, they should have stopped it,” Trump said at the White House, according to Express UK.
Other recommendations from Li include the Chinese Communist Party building regional industrial chains centered on China, and preparing for a global food crisis, and the return of international terrorism during the pandemic.