China’s SWIFT joint venture ‘defensive move’ against US refuted by former bank executive

Name: ‘This is simply patriotism’, Beijing backs Chinese anger over brand boycott of Xinjiang cotton
Uploaded: 2021-03-29T16:30:09.000Z
Duration: 2 min 45 s
Description: ‘This is simply patriotism’, Beijing backs Chinese anger over brand boycott of Xinjiang cotton

The People’s Bank of China last week announced a newly established joint venture with Belgium-based SWIFT financial messaging service and four Chinese institutions

Concerns have been raised that the United States could cut China off from the US dollar-dominated SWIFT system amid souring relations over Xinjiang and Hong Kong

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The move sparked some speculation and debate, with some arguing that it was a “precautionary measure” against the US cutting off China’s access to SWIFT. Photo: Shutterstock

Cissy Zhou

Published: 12:30am, 30 Mar 2021Updated: 8:34am, 31 Mar 2021

A theory that China’s latest joint venture with the SWIFT financial messaging service is a defensive move against the United States has been refuted by a former Chinese bank executive, who insists the move is actually part of efforts to promote the internalisation of the yuan and the development of the nation’s digital currency.

Last week, the People’s Bank of China (PBOC) announced a newly established joint venture with Belgium-based SWIFT financial messaging service and four Chinese institutions that will see a financial messaging services set up through a local network. A localised data warehouse to monitor and analyse cross-border payment messaging will also be established in an effort to make transactions more stable and secure.

[The joint venture is rather to] strengthen cooperation with SWIFT and jointly promote the internationalisation of the [yuan] and the development of the digital currency”, Wang Yongli, a former vice-president with the Bank of China and a former SWIFT board member, said on Sunday.

“It is obviously not in response to the US cutting off SWIFT’s connection to China.”

02:45

‘This is simply patriotism’, Beijing backs Chinese anger over brand boycott of Xinjiang cotton

The joint venture comes amid China’s ongoing tensions with the United States, the European Union, Britain and Canada over the alleged forced labour issue in China’s Xinjiang region, relations which had already been strained by Beijing’s political crackdown on Hong Kong.

The move sparked some speculation and debate, with some arguing that it was a “precautionary measure” against the US cutting off China’s access to SWIFT.

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