The announcement by the US, this time backed by Germany, that it will withdraw “some Russian banks” from Swift, its bank payment system, highlighted on Chinese websites a hitherto little-mentioned competitor, Cips, which uses the currency chinese.
The attention is more extensive on the Guancha portal, from Shanghai, by investor Eric X. Li. Already on Sunday, it published texts warning that, with the decision, the US seeks to make Russia “financially isolated like Iran, but objectively test for the China”.
The fact that Iranian banks resisted a similar decision when the US pulled out of the nuclear deal in 2018 was detailed in a second analysis, listing limits of the Cips, created in 2015. In short, “it’s a challenge, but also an opportunity.”
Guancha also interviewed Chen Xin of Shanghai Jiao Tong University, who recalled that Cips, like Swift, “still depends on banks” for the connection of operations, and “the US can sanction these banks”, affecting the mechanism.
The discussion was advanced by Caixin, the country’s main financial vehicle, from Beijing, with extensive and complementary analyzes on its websites in Chinese and English (image above). It discusses points such as a greater integration of Cips with the Russian payment system, SPFS.
More importantly, he hears from Northeast Securities chief economist Fu Peng that “if you look at Russia in isolation, in principle there will be a big impact” on financial markets, the exchange rate and even trade.
“But at the economic level the impact may not be that significant, although this will largely depend on China’s attitude. Russia has raw materials and China has industrial capacity. This chain greatly reduces the risks for Russia.” .
On the Chinese attitude, a first sign, notes Caixin, came last Wednesday, when the customs administration approved the importation of wheat from all regions of Russia, “giving the country an alternative to the western markets”, especially the European one.
Hong Kong’s South China Morning Post, maintained by billionaire Jack Ma’s Alibaba, also produced a long analysis of Cips, after the US and European “nuclear option” to use Swift to sanction Russia. In short, I conclude by listening to analysts:
“The move to ban certain Russian banks from Swift will likely accelerate the expansion of Beijing’s payment and settlement system.”
