Latest news with #Cross-BorderInterbankPaymentSystem
Yahoo
09-05-2025
- Politics
- Yahoo
Putin and Xi's meeting marks the start of a dangerous new world order
Xi Jinping's arrival in Moscow, to commemorate Russia's VE day, on May 9, (a day after Europe, the UK and the US), wasn't just a formality. It was a very public and deliberate show of support from Russia's closest ally. We already know that China is a critical part of the 'axis of totalitarian states', made up of China, North Korea, Russia and Iran. The countries in this group, prompted by China, have delivered a great deal of support to Russia in its invasion of Ukraine. This includes a significant number of drones from Iran in the early stages of the war, and now weapons and ammunition from North Korea. It was China that helped arrange the rapprochement between North Korea and Russia, opening the door to huge levels of military support. It is worth remembering that, at that time, Russia was in some difficulty and had begun running low on artillery ammunition and other weaponry. Perhaps the best example of this support is the estimated delivery of over five million artillery shells from North Korea, not to mention the thousands of North Korean soldiers now engaged in fighting alongside Russian troops in the Kursk region. During a recent visit to Ukraine, the Ukrainian military revealed to me that these North Korean troops have proven to be more effective than existing Russian troops. But we should cast our minds back to the Winter Olympics in China in 2022. On February 4 2022, Putin flew in, clearly to discuss the coming invasion with Xi. Just 20 days later, Putin's forces invaded Ukraine. What is absolutely clear is that Russia would not have invaded Ukraine without Xi's agreement. On March 22 2023, at a previous meeting, president Xi gave Putin the strongest level of support when he said: 'Change is coming that hasn't happened in 100 years. And we are driving this change together.' This visit of Xi now re-emphasises this strong alliance between them. After all, the alliance isn't just words, as China now buys a huge proportion of Russia's oil and gas; and in return it supports Russia at the UN. This purchase of Russia's oil and gas has increased dramatically in the year following the invasion. China has also encouraged a network of other nations to do the same. When Russia invaded Ukraine, the West not only froze Russian assets but also cut off Russian financial institutions access from SWIFT (Society for Worldwide Interbank Financial Telecommunication), the backbone of global financial transactions. In response, China immediately stepped in and facilitated financial transactions through its own system, Cross-Border Interbank Payment System (CIPS). This intervention alone saved Russia from a cash flow crisis. What should not be forgotten is that China has its own territorial ambitions in Taiwan. China's support for Russia is also because what happens in Ukraine will have a bearing on what happens in Taiwan. Xi is watching carefully to see how strong the West's resolve is over Ukraine, as this will give him a strong indication of how the US and other elements of the Nato alliance might respond if and when Taiwan is blockaded or invaded. So far, what China has seen from the West has significantly emboldened its position over Taiwan. Since the beginning of this conflict, it has become clear that Europe first and foremost was unprepared for any kind of conflict and unable to support Ukraine as they should have done. Even under president Biden, the US was unable to make its mind up whether it wanted Ukraine to win or just not to lose. This was evidenced by the early refusals to supply F-16 fighter jets to Ukraine and in restrictions on Ukraine's use of US missiles to target sites within Russia. Whilst we all want peace, any deal that trades away significant Ukrainian territory would be manna from heaven for president Xi. As Xi got off the plane in Moscow, he must be smiling to himself as he watches the divisions in the West and contemplates the beginning of a new world order. Broaden your horizons with award-winning British journalism. Try The Telegraph free for 1 month with unlimited access to our award-winning website, exclusive app, money-saving offers and more.
Business Recorder
08-05-2025
- Business
- Business Recorder
‘US dollar dominance being fundamentally challenged'
LAHORE: In a compelling analysis of the rapidly evolving global financial landscape, Zafar Iqbal, Vice President of the Pakistan China Joint Chamber of Commerce and Industry (PCJCCI) stated that the long-standing dominance of the US dollar in international trade is being fundamentally challenged. He attributed this shift to the fast-paced development of digital currency infrastructure, led by China's digital yuan and its cutting-edge Cross-Border Interbank Payment System (CIPS 2.0). According to Iqbal, this innovation signals 'a new financial era characterized by speed, transparency, and a multipolar currency order.' Addressing a strategic roundtable discussion at the PCJCCI Secretariat, he highlighted the landmark execution of CIPS 2.0's first international transaction — a 120 million yuan payment for auto parts, completed in just 7.2 seconds from Shenzhen to Kuala Lumpur. This real-time transaction bypassed traditional banking lags, which typically take up to three business days via the SWIFT system. PCJCCI vice president said that this was not just a quick transfer but it was a financial breakthrough. It marked the rise of a new infrastructure that has the potential to redefine how global economies conduct trade, settle payments, and foster growth. He noted that the expansion of China's digital financial systems represents a transformative shift, challenging traditional frameworks historically controlled by Western powers. For emerging economies, especially those in the Global South, this shift offers an opportunity to reduce dependence on dollar-dominated systems and engage in trade on more equitable and transparent terms. Zafar Iqbal said that this isn't merely about faster payments, it's a systemic shift in how global settlements function cutting costs, boosting trust, and offering developing economies like Pakistan the chance to stand on equal financial footing with the world's major players. He also highlighted three transformative advantages offered by CIPS 2.0 and the digital yuan: Cost Annihilation: Traditional cross-border payments via SWIFT incur high transaction and intermediary fees. With CIPS 2.0, fees are negligible—often less than a dollar—allowing massive savings across global trade. Technological Supremacy: Digital yuan transactions can operate offline and leverage smart contracts to auto-trigger settlements, vastly improving efficiency and eliminating fraud-prone paperwork. Security Innovation: CIPS 2.0 uses blockchain-backed transparency and AI-powered risk monitoring to prevent money laundering in real-time, outpacing legacy systems that rely heavily on delayed manual oversight. He explained how these features not only improve financial reliability but also open up a new era of digital trade—where programmable money, instant settlements, and fraud-proof systems are the standard, not the exception. He warned that countries like Pakistan must not remain passive observers to this transformation. Instead, they should align with this rising ecosystem to unlock new trade opportunities, improve economic resilience, and modernize their financial architecture. 'Digital yuan adoption is expanding exponentially,' he added. 'Pakistan must now act strategically—by integrating with these new rails of commerce, we can future-proof our trade and financial sectors, enhance regional partnerships, and reduce our vulnerability to dollar liquidity shocks.' Copyright Business Recorder, 2025
South China Morning Post
22-04-2025
- Business
- South China Morning Post
China rolls out plan to promote its own payment system as US trade war simmers
China has released an action plan to promote the use of the yuan and its own payment system in international trade, as it seeks to reduce its dependence on the dollar amid an escalating trade war with the United States. Advertisement The plan – jointly released by the Shanghai municipal government, the People's Bank of China and the country's financial regulators on Monday – aims to leverage Shanghai's role as a global financial hub to promote the use of the Chinese currency, especially in trade involving countries in the Global South. Shanghai will 'enhance the functionality' of the Cross-Border Interbank Payment System (CIPS) – China's alternative to the Society for Worldwide Interbank Financial Telecommunication (Swift) payment system – and continue expanding the global coverage of the CIPS network, according to the policy. It will also strengthen financial support for Chinese enterprises 'going global' and advance the Belt and Road Initiative, while 'enabling all types of market players to engage in international competition and cooperation in a safer, more convenient and efficient manner', according to an official statement. Advertisement Settling more transactions using China's own currency and payment system would enable Beijing to strengthen its position in global trade networks and reduce the harm caused by any potential US move to curtail its access to the dollar-based financial system.
The Standard
21-04-2025
- Business
- The Standard
China central bank urges state-owned businesses to prioritise yuan in overseas expansion
China's central bank said on Monday it was encouraging state-owned enterprises to prioritise yuan usage in payment and settlement in their overseas expansion, in what is seen as an official attempt to accelerate yuan internationalisation amid intensifying global trade tensions. The comments come as US President Donald Trump has launched so-called "reciprocal" tariffs, which have shaken up global trade and roiled financial markets. Although Trump announced a 90-day pause on planned tariff hikes for most countries, he raised duties on Chinese goods to 145 percent, prompting Beijing to retaliate with counter-measures. The People's Bank of China (PBOC) said it encouraged commercial banks in Shanghai to expand cross-border credit expansion to lower companies' yuan financing costs and promote yuan-dominated imports and exports, according to a notice published on its website. The PBOC said "it will strengthen the construction of Cross-Border Interbank Payment System (CIPS) ... study and push forward with the application of blockchain technology, and provide safe and efficient settlement and clearing services for global trades, shipping, investment and financing denominated in yuan," the notice said. The central bank said it would also support the Shanghai Gold Exchange to cooperate with other overseas exchanges and expand the application of yuan benchmark prices in global mainstream markets. The PBOC jointly issued the notice with National Financial Regulatory Administration, State Administration of Foreign Exchange and Shanghai municipal government. Reuters
Reuters
21-04-2025
- Business
- Reuters
China central bank urges state-owned businesses to prioritise yuan in overseas expansion
SHANGHAI, April 21 (Reuters) - China's central bank said on Monday it was encouraging state-owned enterprises to prioritise yuan usage in payment and settlement in their overseas expansion, in what is seen as an official attempt to accelerate yuan internationalisation amid intensifying global trade tensions. The comments come as U.S. President Donald Trump has launched so-called "reciprocal" tariffs, which have shaken up global trade and roiled financial markets. Although Trump announced a 90-day pause on planned tariff hikes for most countries, he raised duties on Chinese goods to 145%, prompting Beijing to retaliate with counter-measures. The People's Bank of China (PBOC) said it encouraged commercial banks in Shanghai to expand cross-border credit expansion to lower companies' yuan financing costs and promote yuan-dominated imports and exports, according to a notice published on its website. The PBOC said "it will strengthen the construction of Cross-Border Interbank Payment System (CIPS) ... study and push forward with the application of blockchain technology, and provide safe and efficient settlement and clearing services for global trades, shipping, investment and financing denominated in yuan," the notice said. The central bank said it would also support the Shanghai Gold Exchange to cooperate with other overseas exchanges and expand the application of yuan benchmark prices in global mainstream markets. The PBOC jointly issued the notice with National Financial Regulatory Administration, State Administration of Foreign Exchange and Shanghai municipal government.
