CCP Partners With Bank for International Settlements to Displace the Dollar
“We will cultivate a trading center and pricing mechanism that puts China first (以我为主) and actively promote settlement in local currency.” excerpt from the Chinese Communist Party’s (CCP’s) 14th five-year plan for 2021–25.
The CCP’s yuan liquidity pool with the Bank for International Settlement is not just a challenge to the dollar, it’s also one more example of China’s increasing influence over global organizations.
The CCP has been trying for years to internationalize the yuan as well as decrease the dollar’s dominance in international trade as both an exchange and reserve currency. On June 25, the People’s Bank of China announced its plan to partner with the Bank for International Settlements (BIS) and five other central banks to create a yuan liquidity pool aimed to stabilize economies during periods of market volatility. Apart from the PBC, the founding members of the new pool are Bank Indonesia, the Central Bank of Malaysia, the Hong Kong Monetary Authority, the Monetary Authority of Singapore, and the Central Bank of Chile.
Under the terms of the agreement, each member will contribute $2.2 billion worth of dollars or yuan to the pool known as the Renminbi Liquidity Arrangement (RMBLA). The balance will be held by BIS which will release funds to members, in times of need, through a collateralized liquidity window.
Over the decades, BIS has cooperated with the central banks of reserve currency-issuing countries to implement liquidity support packages, which they provide to other nations during times of market stress and instability. The Yuan Liquidity pool is the first such arrangement that has been made using yuan and is a step toward achieving the CCP goals laid out in the 14th five-year Plan. This plan calls for a return to globalization and a gradual internationalization of the currency.
The plan also refers to the “weaponization of finance in recent years,” which is a veiled reference to the U.S. economic sanctions against Russia in response to the invasion of Ukraine. Among those sanctions was a ban that blocked seven Russian banks from using the Society for Worldwide Interbank Financial Telecommunication (SWIFT).
In an attempt to insulate itself from a U.S.-dominated financial system, China created its own SWIFT-like system in 2015 called the Cross-Border Interbank Payment System. In the same year, China managed to have the yuan added to the International Monetary Fund’s (IMF’s) special drawing rights currencies. In 2020, U.S. sanctions on CCP officials over the dissolution of Hong Kong’s freedoms accelerated Beijing’s efforts to circumvent the U.S.-led global financial system. To this end, they have been in negotiations with Saudi Arabia to settle oil trades in yuan and to settle trade with Russia in rubles or yuan. There have also been discussions through the Belt and Road Initiative for African countries to increase their yuan reserves and to settle trade with China in yuan.
Russia has served as a cautionary tale for the CCP. Seeing the damage that U.S. sanctions and removal from the SWIFT system can do to an economy, Xi Jinping is redoubling his efforts to create a parallel China-led global financial system. Given the current state of the Chinese economy, with growth projections the lowest in decades, many analysts feel it is unlikely that China would make a move on Taiwan until it has first found a way to function outside of the U.S. system and without dollars.
The U.S. Federal Reserve’s increasing interest rates to combat inflation has attracted investment to the United States, but it has also made borrowing in U.S. dollars more expensive. As the Bank of China has so far refused to raise interest rates, borrowing in yuan may be more attractive for the five member countries of the RMBLA. In August, the yuan’s allocation in the IMF’s special drawing rights currency will be increased to 12.28 percent, a signal that the yuan is becoming internationalized. Currently, the yuan accounts for only 2.14 percent of global payments. As China is a major trading partner of the other RMBLA members, it may become expedient for them to hold more yuan in reserves and to settle trade with China in yuan.
So far, the internationalization of the yuan has been slowed by the CCP’s tight controls on capital flows, manipulation of the currency, and lack of transparency. However, the new cooperation with BIS will put the world one small step closer to yuan globalization while the CCP moves toward its goal of financial independence and a yuan-backed world financial system.
What Will Replace TikTok?
The year 2021 was a good one for Bytedance, a problematic company with close ties to the Chinese Communist Party (CCP).
TikTok, its main cash cow, was the most downloaded app of the year. Although—and this is a point of considerable importance—compared to 2020 figures, total downloads decreased by 194 million. TikTok is still popular, just not as popular as it was a couple of years ago. It’s losing its grip, slowly but surely. Every social media platform, even one as big as TikTok, comes with an expiry date. Very soon, the video-sharing app will find itself dethroned by something even bigger and more powerful.
Before discussing TikTok’s replacement, we must first discuss cable TV. More specifically, the death of cable TV. Interestingly, Netflix, the company responsible for “killing” cable, is also dying a quick death. Between April and June, it lost almost 1 million subscribers. Rather ironically, Netflix became the very thing that it set out to replace. How so? As the writer Andrew Laurence so brilliantly put it, beyond “a handful of titles, there isn’t much keeping viewers tuned into Netflix besides habit—which is pretty much where many of them were with cable before they cut the cord and downloaded the app.”
Once cool and edgy, Netflix became too comfortable with its power. Because of this, according to Laurence, Netflix went from being slim and streamlined to “fat and dull, with an outsized appetite for increasingly low-calorie content.” So, you ask, what will replace Netflix? Its replacement is already here. In fact, it has been around for the better part of 20 years.
Founded in 2005, YouTube has more than 2 billion active users per month (more than a quarter of the global population). By 2025, it will have close to 3 billion active users. As most people know, YouTube is much more than music videos and Joe Rogan clips.
Today, there are more than 51 million YouTube channels in existence (but only 33,000 TV channels). Mr. Beast and PewDiePie, two of the most popular YouTubers on the planet, have a ridiculous amount of subscribers. The former has 97 million; the latter has 111 million. T-Series, the first YouTube channel to surpass 200 million subscribers, has more than 383 million subscribers and more than 718 billion unique views.
TV can’t compete with YouTube, and Netflix can’t compete, either. YouTube took social media influencers and gave them a platform to create their very own TV channels. A simple idea, yet a truly genius one.
In September 2020, obviously concerned (and perhaps inspired) by the popularity of TikTok, YouTube created YouTube Shorts, a short-form video-sharing platform that limits pieces to 60 seconds in length. Like TikTok, YouTube Shorts is a product of the TL;DR (“too long; didn’t read”) age we now find ourselves in. With diminishing attention spans, younger users want rapid bursts of content, repeatedly.
With more than 5 trillion views in less than two years, Shorts appears to have hit the mark. In June, YouTube announced that Shorts attracts 1.5 billion unique eyeballs each month—500 million more than TikTok.
Juggernaut of Epic Proportions
This is good news, many will say. After all, TikTok appears to have close ties with Beijing. Anything that can disrupt its influence should be celebrated. However, we must also remember that Google, a highly problematic company with a history of weaponizing data and spying on users, owns YouTube. A juggernaut of epic proportions, Google is worth $1 trillion. With great power, as they say, comes great responsibility. Google is indeed powerful, but it’s far from responsible.
In July, Denmark’s Data Protection Agency announced a ban on Google’s services in schools. The announcement came shortly after Danish specialists were asked to assess the ways in which Google processes personal data. Clearly unimpressed with the results of the risk assessment, the agency revealed that the likes of Gmail, Google Docs, and Google Drive were in direct violation of the European Union’s General Data Protection Regulation data privacy regulations. The agency ruled that Google services should be immediately removed from classrooms across the country.
If Google can’t be trusted with Gmail and Google Docs, why should it be trusted with the way it controls YouTube’s data? Remember, Google is the company that removed the ‘Don’t Be Evil’ clause from its code of conduct. This is a company that does the bidding of the Saudi Arabian government.
So although TikTok is losing its power and this loss of power is a positive for society, we should be wary of what takes its place. In truth, when it comes to big tech and insanely popular social media platforms, there are no good options. YouTube Shorts is better than TikTok in the same way that a punch to the stomach is slightly better than a kick to the groin.
China Threatened Pelosi
Nancy Pelosi is the woman of the hour. She visited Taiwan, met with President Tsai Ing-wen, and said a simple truth before the flashing lights: We stand with Taiwan.
The proof will be in the pudding if, as U.S. speaker of the House, she pushes through the necessary legislation, including increased security assistance and official recognition of Taiwan as an ally.
Pelosi certainly has game.
“America’s determination to preserve democracy, here in Taiwan and around the world, remains ironclad,” the speaker said on Aug. 3.
During the visit, and as second in line to the American presidency, she referred to Taiwan as a country, saying America could learn “how you address the COVID crisis, how we advance respect for all of the people in our countries as we go forward.”
Pelosi previously displayed such heroism. Just two years after the Tiananmen massacre in Beijing, she visited the square and unfurled a pro-democracy banner, only to be questioned by Chinese police.
Pelosi has for years challenged the quicksand of illusions upon which the power of the Chinese Communist Party (CCP) rests. For example, the One China policy does not, as CCP leader Xi Jinping seems to think, mean that Beijing can “reunify” with Taiwan through invasion. That would be one more nail in freedom’s coffin.
Pelosi therefore just helped a slumbering America, especially on the left, wake up from what could have been its last sleep. She dramatically challenged the idea of CCP omniscience. In particular, she refused to comply with Beijing’s threats against the Taiwan visit, which included, remarkably, a backhanded one to down her U.S. Air Force plane.
In response to such defiance, China’s Foreign Minister Wang Yi menaced, “Those who play with fire will come to no good end, and those who offend China must be penalized.”
To prove the point, Beijing mobilized a four-day “series of joint military operations around the Taiwan Island,” according to its state media, along with live-fire drills that impeded shipping and flights.
The drills included the People’s Liberation Army (PLA), navy, and air force, as well as conventional and strategic missiles.
On the day of Pelosi’s visit, 22 Chinese military planes flew across the median line in the Taiwan Strait, a rare provocation.
The map of the six PLA maritime exclusion zones that surrounded Taiwan between Wednesday and Thursday, including infringement of Taiwan’s territorial waters, make the “military operations” into a “blockade,” according to Taiwan authorities.
Xi Jinping has in the past threatened to “reunify” the island through invasion, but China’s ambassador to France threatened not only “reunification” with Taiwan, but “reeducation.” In China, “reeducation” is synonymous with concentration camps.
Beijing also restricted the import of Taiwanese citrus, seafood, construction material, and cookies. These sanctions all impose economic penalties on areas and industries that support President Tsai. Approximately 44 percent of Taiwan’s exports go to the mainland, making Taipei particularly vulnerable to Beijing’s economic pressure tactics.
But the world is waking up, and came out in support of Pelosi.
Foreign ministers of all G-7 countries issued a statement affirming the right of G-7 politicians to visit Taiwan, saying there was no change in the status quo, and urging calm. “There is no justification to use a visit as pretext for aggressive military activity in the Taiwan Strait,” according to the ministers.
Dimon Liu, a U.S.-based China expert and human rights activist, wrote in an email that Xi lost face “big time in this round.”
Pelosi’s visit provided space for “Xi’s opponents within the CCP elite to push back against Xi,” she wrote.
“If Pelosi were to abort the trip, as insisted by the Biden [National Security Council] and the majority of the China watchers, an invasion of Taiwan would have been far more likely” because Beijing would have proved that the United States could be bullied, she said.
Senator Bob Menendez (D-N.J.), Chairman of the Senate Foreign Relations Committee, supported Pelosi’s trip and Taiwan more broadly. He introduced a bipartisan bill in June with Senator Lindsey Graham (R-S.C.) called the Taiwan Policy Act of 2022. It would replace strategic ambiguity over whether America will defend the island, with a clear, “robust and credible deterrence to preserve peace … across the Taiwan Strait.”
The bill provides $4.5 billion in security assistance and promotes Taiwan to the status of a major non-NATO ally. This is in U.S. interests as Taiwan upholds the global economy as the “foundry of the world” for advanced computer chips, according to Menendez.
There is a “window of opportunity” to act, the senator wrote, before China invades. Reversing an invasion would be somewhere between catastrophic and impossible.
Therefore Congress must act, and act now.
China in Focus
In this special episode, we sat down with China economic analyst Antonio Graceffo. He talks about the current inflation, if China is involved, and how China’s economic outlook would be felt by U.S. consumers. We also sat down with Aryeh Lightstone, former special envoy for the Abraham Accords and author of “Let My People Know.” He touches on how U.S.–Middle East relations tie into the current fossil fuel tensions, the steps that need to be taken to ensure American troops aren’t sent back there, and more.
Former Secretary of State Mike Pompeo discusses the true threat the Chinese Communist Party poses to the United States and how America should respond to China’s aggression
Zooming In With Simone Gao
China launched a series of joint military operations around Taiwan immediately after Speaker Pelosi left Taiwan. The operations include live-fire military drills in zones encircling Taiwan — at some points, within just 12 miles of the island’s shore. Did Pelosi’s trip trigger China’s aggression? Is China a paper tiger? What will happen after her visit? Zooming In’s Simone Gao spoke with Rupert Hammond Chambers, president of the U.S. Taiwan Business Council.
Slapping sanctions on Nancy Pelosi, firing missiles into waters near Taiwan, and waging cyber attacks—Beijing reacts to the House speaker’s Taiwan visit. Is it a serious escalation, or a show for its domestic audience? The Pentagon is delaying a scheduled ballistic missile test after Beijing’s fiery reaction to Pelosi’s Taiwan visit. U.S. Sen. Josh Hawley gives the only “no” vote, as the Senate overwhelmingly favors Sweden and Finland’s ask to join NATO. Hawley explains. The United States relies on a single Taiwanese company for the most advanced microchips. But what would happen if China invades Taiwan?
The China Model Delusion and the West’s Useful Idiots—Former Apple Daily Columnist Simon Lee
“Jimmy [Lai] once told me, ‘The fight for freedom is a very lonely pursuit … You have to be prepared to be very lonely.’”
We discuss Hong Kong’s future and the deadly illusion of “the China model.” From draconian zero-COVID lockdowns to a real estate bubble collapse worse than the 2008 financial crisis, Simon Lee breaks down what he sees hidden between the lines of Beijing’s propaganda messaging.
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World Economic Forum ‘Deepens Relationship’ With the CCP
The globalist agenda and the push for global governance is now in the spotlight with World Economic Forum policies under scrutiny. However, what many people don’t know is that globalism and communism are actually two sides of the same coin, which is why the World Economic Forum has been furthering its relationship with the Chinese regime.
Trevor Loudon exposes the ties between the World Economic Forum and the Chinese Communist Party.
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