Unreliable entities list can counter US financial intimidation

By Hu Weijia Source:Global Times Published: 2019/6/25 20:53:40

Unreliable list can counter US financial intimidation

China's Foreign Ministry on Tuesday slammed a reported US decision to probe Chinese banks for alleged violations of US sanctions, saying it opposes US long-arm jurisdiction.

Three large Chinese banks may face a financial "death penalty" because a US judge found those banks "in contempt for refusing to comply with subpoenas in an investigation into North Korean sanctions violations," the Washington Post reported on Monday. 

Chinese banks mentioned in the report denied on Tuesday that they were being investigated for suspected violations of laws. 

However, the alleged "penalty" cannot be tolerated even if it's just a smoke bomb.  

China has been strictly implementing UN Security Council sanctions against North Korea, but it has no obligation to support US unilateral actions. If the US government requires Chinese banks to share customer data and banking records, there must be convincing evidence to support the allegation that those banks have violated UN sanctions. Otherwise it will only be an unreasonable attack against Chinese financial institutions amid an escalating trade war. 

Without convincing evidence, the alleged "death penalty" is actually a form of financial intimidation as the US flexes its financial muscles. But a trade war between the US and China is not a fight among shrews that has no rules. Practices such as financial intimidation are intolerable.

How can US long-arm jurisdiction be opposed? No matter what measures are adopted by the US against Chinese banks, Beijing has reason to respond to this by targeting US financial institutions doing business in China with similar countermeasures. 

If the US launches an investigation into Chinese banks without convincing evidence, or imposes a financial "death penalty" on Chinese enterprises, why can't China do the same in terms of US financial institutions? US companies' heavy reliance on the Chinese market is a trump card in China's hand to strike back against possible US financial sanctions.

Regardless of whether the Washington Post report is true or not, financial intimidation reminds China to build and announce its unreliable entities list as soon as possible. 

If big Chinese banks face a "death penalty," then Beijing can list some US companies as unreliable entities and punish US-based financial institutions such as Citibank and Morgan Stanley if they "help finance" those companies on China's unreliable list.  

Financial intimidation is prompting China to map out a backup plan as soon as possible to reduce its dependence on US-influenced financial institutions. 

The current global financial supply chains are a complex network, but now US unilateralism leaves people with no choice but to cut the chains and pursue financial independence with measures such as enabling transactions in the absence of global transaction service provider SWIFT. Once this process is complete, US financial hegemony will be shattered. 

Financial intimidation suggests the US is overdrawing its financial power, with the trade war serving as the last stage of its hegemony.

The author is a reporter with the Global Times. bizopinion@globaltimes.com.cn
Newspaper headline: Unreliable list can counter US financial intimidation


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