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What do the weaponisation of the US dollar and sanctions mean for China?

Daryl Guppy
Daryl Guppy4/23/2021 06:30 AM GMT+08  • 5 min read
What do the weaponisation of the US dollar and sanctions mean for China?
The development of China’s sovereign digital currency is ready to act as a bulwark against further weaponisation of the US dollar.
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Much attention among the US and its allies has been focused on the Chinese threat to Taiwan. The level of concern is not necessarily reflected in Taiwan newspapers, but it is leading to a lot of sabrerattling which is of concern with regard to the smoothness of trade relationships.

The situation is part of a broader picture of confrontation with China. There was some expectation that the new President Joe Biden would adopt a more strategic and diplomatic approach to America’s engagement with China. This more diplomatic approach to China has not eventuated and that raises several concerns for business engagement.

Despite the headlines, front and centre of these concerns is not Taiwan nor whatever is or is not happening in Xinjiang. Front and centre is the increased willingness of the US to abuse its hegemon position with a variety of sanctions. These were a clumsy weapon favoured by former President Donald Trump, who took the weaponisation of the US dollar to new highs. Once reserved for the most serious of cases, usually backed with United Nations consent and agreement, the use of dollar sanctions became a direct tool of US foreign policy, sometimes in defiance of the UN.

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