World public opinion is focused on wars in Ukraine and the Middle East. Meanwhile, China quietly conduct their own preparations and gradually cut off from the west. The wars in the Middle East and Ukraine are cruel to the victims, but helpful for the Chinese. They divert attention from preparations to the opening of the possible third front at the Indo-Pacific.
Beijing gains economic independence and freedom of action, freeing himself from the fiscal dependence on Washington, weakening America, strengthening cooperation with Russia and immunizing to the oncoming crisis.
Here are three signs that China is preparing for war.
China reduces their shares in American government bonds to the lowest level in twelve years. Former adviser to the Chinese Central Bank Yu Yongding, he has already spoken on this subject in the Beijing forum, which took place in May 2023. He clearly recommended China to adapt his foreign assets portfolio to new realities. He called for limiting the possession of American government bonds – especially in the face of the growing risk of conflict with the USA.
At the peak moment in November 2013, China had $ 1 trillion $ 320 billion. (approx. $ 5) in American tax bonds. Since then, China has got rid of almost 40 percent. from this amount.
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Currently, China has American government bonds worth only $ 750 billion. (over PLN 800 million).
Large banks and economic research institutes have registered this sale of American bonds. Professor Ferdinand Fichtner from the German Institute of Economic Research in Berlin confirms that the People's Republic of China says goodbye to close connections with the American dollar.
China increases their turmoil resistance
The US Treasury Department, which repays interest on the American national debt, could stop serving the debt in the event of a conflict, and thus deprive China of interest income. These assets would be de facto frozen.
The American Federal Reserve is about $ 300 billion. (1 trillion PLN 271 billion) of Russian assets – frozen shortly after the invasion of the Russian army to Ukraine – provided the Chinese material illustrating their own weakness.
“The security of the Chinese means of storage of value has become a geopolitical issue” – quotes the Beijing Finance expert newspaper “South China Morning Post”.
Therefore, China is developing their own electronic payment system, called the cross -border interbank payment system, which has been operating since the end of 2015 in a competition with the Western SWIFT payment system, and nowadays also corresponds to payment flows for the Russian economy.
In this way, China gain economic independence, which can allow them to independently military activities – e.g. in the matter of Taiwan.
Chairman of the Chinese People's Republic XI JinpingNoel Celis/AFP/East News/AFP
America is approaching “imperial overload”
Americans feel Chinese actions because they cause a decrease in government bond prices.
For the Americans, the withdrawal of the Chinese from the dollar comes at the worst possible moment, because the United States is addicted to loans like never before. The US budget deficit has increased to approx. $ 900 billion. (approx. 7 trillion PLN 120 billion).
This means that the United States has a debt of a debt in the amount of approx. 36.2 trillion. (135 trillion PLN 600 billion). Wars in Europe and the Middle East and a possible conflict with China can lead to what experts call “imperial overload” – excessive expansion and extending the attention of the world power.
I’m Ashley Davis as an editor, I’m committed to upholding the highest standards of integrity and accuracy in every piece we publish. My work is driven by curiosity, a passion for truth, and a belief that journalism plays a crucial role in shaping public discourse. I strive to tell stories that not only inform but also inspire action and conversation.
