Chinese officials and economists have been unusually public in recent months when discussing worst-case scenarios in which China is blocked from the dollar-trading zone, or Washington freezes. and confiscated part of the huge US debt that China is holding.

Those concerns have prompted some experts in Beijing to make calls to strengthen the yuan’s global influence and reduce dependence on the greenback.

Some economists have even come up with the idea of exporting China-made Covid-19 vaccine in yuan and are looking to bypass the dollar payment in a digital version of the money. bad.

"The internationalization of the yuan is a blessing," said Shuang Ding, head of China economic research at Standard Chartered and a former economist at the People’s Bank of China (PBOC). know.

The threat of Sino-US financial "disintegration" is becoming "clear and present," Ding said.

While it is unlikely to completely separate the world’s two largest economies, the Trump administration has pushed for a partial split in key areas of trade, technology and finance.

Washington has launched a series of Chinese sanctions actions, including proposing to ban US listing of Chinese companies that do not meet US accounting standards and ban TikTok and WeChat apps due to Chinese owned. More tensions are expected in the upcoming US election on November 3.

Yu Yongding, an economist at the Chinese Academy of Social Sciences (CASS), told Reuters the new sanctions will likely involve the US seizure of Chinese as‌sets in the US.

He said that separating China from the dollar payment system is not impossible, so China should prepare.

Any move by Washington to remove China from the dollar payments system or Beijing’s retaliation for holding a large amount of US government debt could be swaying, analysts said. financial markets and harm the global economy.

China is vulnerable to US sanctions and should prepare "soon" and "really", said Fang Xinghai, a senior securities manager.

"Such things have happened to many Russian businesses and financial institutions," Fang said in a June forum hosted by Chinese media outlet Caixin.

Mr. Guan Tao, former director of the international payments division of the State Foreign Exchange Administration of China and currently Head of the Global Economic Division at BOC International (China), also said that Beijing should be ready for separation.

"We must be prepared that the United States can expel China from the dollar payment system," he told Reuters.

In a report he co-authored last month, Guan called for an increased use of the renminbi payment system. Currently, most Chinese cross-border transactions are paid for in dollars through the SWIFT system - the US international payment system.

After five years of lull, Beijing is working to revive the yuan’s globalization.

The PBOC last month also urged financial institutions to expand Chinese-denominated commercial transactions and to prioritize the use of local currencies in direct investment.

China Central Bank chief Yi Gang said the renminbi internationalization is going well, with cross-border pre-settlements up 36.7% in the first half of 2020 compared with a years earlier.

The yuan’s global foreign exchange reserve ratio surpassed 2% in the first quarter, Yi said. The yuan also beat the Swiss franc in June to become the fifth most used currency in international payments, with a weight of 1.76%, according to SWIFT.

Tommy Xie, head of China studies at OCBC Bank in Singapore, suggests one way to speed up cross-border payments is by pricing some exports in yuan, such as vaccines. -cancon virus vaccine.

Another method is to use the proposed digital yuan in cross-border transactions based on currency swaps between central banks, bypassing systems like SWIFT, Ding Jianping, professor proposed finance at Shanghai University of Finance and Economics.

China is rapidly making plans to develop a sovereign digital currency, while the PBOC is busy signing currency swap deals with foreign partners.

Standard Chartered’s Shuang Ding said Beijing has no choice but to prepare for Washington’s "nuclear option" to remove China from the dollar payments system.

"Beijing cannot fall into turmoil when real sanctions do hit China," he said.