China’s SWIFT joint venture a ‘defensive move’ in US financial war after Alaska talks underlined ongoing tensions
- Belgium-based SWIFT financial messaging service provides a network for financial institutions worldwide to send and receive information about financial transactions
- But some Chinese medium and small-sized banks have reported unstable connectivity to the network, affecting their cross-border transactions
China’s latest joint venture with the Belgium-based SWIFT financial messaging service is a “defensive move” amid ongoing tensions with the United States, highlighted by last week’s fractious talks in Alaska.
China’s central bank on Tuesday announced that a newly established joint venture with SWIFT and four Chinese institutions will offer localised financial services to make cross-border transactions more stable and secure.
The US will not accept that the world is changing and will keep imposing sanctions and escalate the financial war
“Many people had expected that now with [US President Joe] Biden, things would be different, but we saw last week in Alaska it is actually still the same. To the US, China is a threat and needs to be undermined in every possible way,” said Oriol Caudevilla, strategic adviser at Alpha Bright Asset Management and fellow at the Digital Euro Association.
“The US will not accept that the world is changing and will keep imposing sanctions and escalate the financial war. This may affect China and may be a concern for China, and the joint venture is a defensive move.”
As China’s financial industry continues to open up to the outside world, more domestic institutions use the global financial network and information services provided by SWIFT.
But some Chinese medium and small-sized banks have reported unstable connectivity to the SWIFT network, affecting their cross-border transactions, the People’s Bank of China (PBOC) said.
The cooperation between SWIFT and Chinese-funded institutions is mutually beneficial with win win results