22 April 2019
Most countries hold their foreign exchange reserves in US dollars because the currency is viewed as the world's most stable. Photo: Bloomberg
Most countries hold their foreign exchange reserves in US dollars because the currency is viewed as the world's most stable. Photo: Bloomberg

What? China calls for ‘de-Americanized’ world

Editorials in Xinhua, China’s leading government-controlled news outlet, never cease to amuse me, but the one published Oct. 14 made me spill my beer.

While most are artfully devious, this commentary was not so subtle, with columnist Liu Chang saying it’s “a good time for the befuddled world to start considering building a de-Americanized world”.

For a beer aficionado like me, that’s akin to saying America has gone flat—in essence, losing its foamy head and zestful, brewery-fresh flavor—and that I should switch to drinking wine coolers. Or worse.

China demanded that the US dollar be replaced as the international reserve currency, and by doing so, went far beyond the propaganda that we’ve come to know and love for pure entertainment value. The tenor of the piece suggested that America’s leaders are running around like chickens with their heads cut off.

Laying it on thick, China called for an end to the “pernicious impasse” in the US over raising the debt limit and ending the partial government shutdown, saying the world needed another reserve currency so nations could protect themselves “from the spillover of the intensifying domestic political turmoil in the United States”.

“The cyclical stagnation in Washington for a viable bipartisan solution over a federal budget and an approval for raising the debt ceiling has again left many nations’ tremendous dollar assets in jeopardy and the international community highly agonized,” the commentary added.

China goes on to say that the US is old and past its prime, in effect, telling the world they need to tap a fresh keg.

“The world is still crawling its way out of an economic disaster thanks to the voracious Wall Street elites,” the commentary added. “Such alarming days when the destinies of others are in the hands of a hypocritical nation have to be terminated.”

As a reminder, nothing is published by Xinhua without the blessing of the ruling Communist Party of China, so for the editorial to go so far as attack America’s pre-eminent position in favor of “a new world order” is astonishing.

The Los Angeles Times notes that most countries hold their foreign exchange reserves in US dollars because the currency is viewed as the world’s most stable. China is the largest foreign holder of US debt, with about US$1.3 trillion in Treasury bonds, and is concerned about the impact of a US failure to raise the debt limit on those holdings.

For reference, US Secretary of the Treasury Jack Lew has said that the US will run out of money to pay its bills on Thursday if Congress does not authorize an increase in federal borrowing limits.

That said, everyone in the world knows, or should know, that that’s never going to happen. (US President Barack Obama will no doubt meet with congressional leaders from both parties, resulting in a break in the political stalemate.)

The Xinhua commentary also slammed the US for claiming “the moral high ground” while “covertly doing things that are as audacious as torturing prisoners of war, slaying civilians in drone attacks, and spying on world leaders”. It characterized the US as a “meddling” nation that introduces chaos into the world for its own ends.

“Instead of honoring its duties as a responsible leading power, a self-serving Washington has abused its superpower status and introduced even more chaos into the world by shifting financial risks overseas, instigating regional tensions amid territorial disputes, and fighting unwarranted wars under the cover of outright lies,” said Xinhua.

All said, it appears that China wants to be the architect for building a de-Americanized world and, in so doing, make its move to replace the US as the global leader. I’ll have to think that one over with a beer.

Ray Kwong is a China commentator. He writes on China for Forbes. He is also a China business development strategist and marketing consultant.

– Contact the writer at [email protected]




A strategist and marketing consultant on China business

EJI Weekly Newsletter

Please click here to unsubscribe