Avoid falling into the trap of public opinion! What is the background of the new batch of anti China bills in the United States? What is the impact? Increase | Risk | US | Propose | Related | International | Bill | Finance
In February this year, the US Congress proposed 10 anti China bills, focusing on finance, Taiwan, and public health, which attracted widespread attention both domestically and internationally. These 10 bills are currently in the early stages of the US Congress and are far from their final implementation. The relevant content is mostly about "re mentioning old cases", which has limited substantive impact on me. We should avoid falling into the public opinion trap set by the United States, adhere to putting ourselves first, concentrate on doing our own things well, and actively respond to various risks and challenges.
1、 The main background and progress of a batch of anti China bills proposed by the US and Singapore
These 10 anti China bills were proposed by the Financial Services Committee of the United States House of Representatives. The committee has frequently imposed sanctions on foreign countries by leveraging the global financial hegemony of the United States, and in recent years, there has been a significant increase in anti China issues raised. The 10 anti China bills proposed in this round are concentrated at the beginning of this year. The committee held a hearing in February with the theme of "Dealing with Economic Threats from China", focusing on discussing the anti China bill. Only about a month after the introduction of these 10 anti China bills, they were deliberated and passed by the House Finance Committee, with a clear "hasty" and "deliberate" color.
These 10 anti China bills focus on the four traditional anti China areas in the United States. One is to suppress the status of the renminbi, and the relevant laws are the China Currency Accountability Act and the China Exchange Rate Transparency Act. The relevant measures include pressuring US officials stationed at the International Monetary Fund to prevent the increase of the renminbi's share in the Special Drawing Rights basket of currencies, and calling for increased transparency in the renminbi exchange rate system. The second is to suppress the upward trend of China's financial international influence. The relevant bills are the China Financial Threat Mitigation Act and the Act to Align the US Securities and Exchange Commission with the International Development Association of the World Bank. The relevant measures include requiring US financial regulatory authorities to submit reports on US financial risk exposure to China, and increasing US influence in the World Bank's International Development Association.The fourth is the issue in the field of public health, with relevant bills including the Prevention of Financing of Illegal Synthetic Drugs Act, the Protection of US Emergency Vaccines Act, and the Strengthening of Public Health Emergency Medical Supplies Act. Related measures include preventing financing activities related to illegal synthetic drugs, diversifying vaccine supply chains, and optimizing procurement mechanisms for public health emergency medical supplies.
These 10 anti China bills have made varying progress, but they have not yet been passed in the US Congress, and there is a significant distance from their final implementation. Among them, the China Financial Threat Mitigation Act and the Prevention of Financing for Illegal Synthetic Drugs Act were voted on by the US House of Representatives on May 22nd. The remaining 8 bills will only be reviewed by the Financial Services Committee of the House of Representatives, and will require further steps such as a vote in the House of Representatives, a vote in the Senate, and signature by the President before they can officially take effect, with uncertainty in each step. From past experience, a considerable number of bills have passed the deliberation of specialized committees or the vote of the House of Representatives, but have not yet come into effect, with a greater emphasis on political showmanship than implementation.
2、 The impact of this round of anti China legislation
Out of the 10 bills, 5 are "old bills" that are not innovative.After the above 5 bills were proposed, they did not enter the House of Representatives voting stage for a long time. This time, they are mainly proposed in the form of new bills, "new bottles of old wine", and the main content is no different from before. Meanwhile, the relevant sanctions measures have not exceeded the traditional toolbox of US external financial sanctions.
The setting of implementation clauses also reflects the concerns that the US still has about financial repression against China, with form over substance and limited impact on me.
The China Financial Threat Mitigation Act and the China Currency Accountability Act have lost their favorable timing and have had little impact on me. The above two bills were first proposed in May and June 2021, respectively. The former aimed to suppress the Chinese yuan from increasing its weight in the SDR basket currency share adjustment before the end of July 2022, while the latter aimed to use the excuse of real estate financial risks to impose financial restraint on me. But in May last year, during the IMF's new round of SDR valuation review, the weight of the renminbi in the SDR basket currency was successfully raised from 10.92% to 12.28%. Recently, China has optimized its real estate financing policies, improved the financing environment for high-quality real estate enterprises, increased transaction activity in the real estate market, and restored market confidence. Overall, the above two bills have lost their favorable timing in the short term.
The three bills, including the Prevention of Financing of Illegal Synthetic Drugs Act, do not directly mention China, but they involve strengthening the influence of the United States in international organizations and cooperation, improving the independence of the drug supply chain, and have limited direct impact on China.
3、 Concentrate on doing your own things well and actively respond to various risks and challenges
Overall, the impact of this round of anti China legislation initiated by the US House of Representatives on me is limited, and it is still uncertain whether it will ultimately be implemented. The relevant proposals are anti China in form and show off in reality. We should avoid falling into the public opinion trap set by the United States, adhere to putting ourselves first, concentrate on doing our own things well, and actively respond to various risks and challenges.
One is to adhere to bottom line thinking, actively resolve financial risks, and maintain financial security. China has significant advantages such as a large economic scale, abundant development potential, and strong resilience, and has the ability to resolve financial risks and maintain financial security in development. In the future, we can deepen the structural reform of the financial supply side, further improve the top-level design of the financial system, and establish a sound mechanism for preventing and resolving financial risks. Further enrich risk disposal resources, enrich safeguard measures, strengthen regulatory coordination, and enhance the efficiency of financial supervision. More precise and effective disposal of risks in key areas, dismantling cross financial business risks, and strict prevention of emerging risks, allowing malicious speculation by overseas anti China forces to be self defeating.
The second is to further promote high-level financial opening up to the outside world and enhance international competitiveness. In recent years, the pace of China's financial industry opening up has been accelerating, and the level of openness has steadily improved. In the future, we should further create a market-oriented, rule of law, and internationalized first-class business environment, gradually loosen restrictions on financial activities and products, as well as various barriers to entry into the domestic financial market, and steadily expand institutional openness in the financial field, including rules, regulations, management, and standards. Further enhance the international reputation of China's financial opening up to the outside world, continuously enhance the attractiveness and capacity of the domestic market for international capital, and continuously enhance the international influence of the domestic financial market.
The third is to strengthen regional financial cooperation and break the threat of US sanctions. Expand financial cooperation with East Asia, ASEAN, and the European Union, and increase the proportion of local currency settlement in bilateral trade. In regional economic cooperation negotiations, strengthen regional financial cooperation and governance, and establish a new type of international financial governance system that is more suitable for the interests of emerging market countries. We will deepen financial cooperation among countries along the the Belt and Road and strengthen the role of regional international financial institutions such as the the Silk Road Fund and the Asian Investment Bank. Improve existing currency stability mechanisms such as the Chiang Mai Agreement and BRICS emergency reserve arrangements. Actively participate in external financial cooperation such as Islamic finance and the franc zone of the African Financial Community.
The fourth is to promote the internationalization of the RMB in an orderly manner, deepen the international currency functions of RMB trading settlement, investment and financing. We will improve the policy framework for the international use of RMB, strengthen the construction of RMB international infrastructure such as the account system and payment and clearing system, guide financial institutions to improve cross-border RMB financial services, and better meet the local currency settlement needs of countries related to the "the Belt and Road" and ASEAN. Promote the comprehensive institutional opening of China's financial market, provide a more friendly and convenient investment environment, and enhance the willingness of overseas entities to hold RMB. Deepen monetary and financial cooperation with relevant countries, strengthen currency exchanges between China and its trading partners, and optimize the ecological environment for the international use of the renminbi.
The fifth is to further enhance my position and role in the international financial governance system. Continuously promote reforms of the IMF and World Bank, strive for more voting and speaking rights, increase the weight of the renminbi in the SDR basket, and promote diversification of the sources of employees and executives in international financial organizations. Continue to make good use of international cooperation platforms such as the G20, and promote the improvement of institutional arrangements and mechanism settings for international macroeconomic policy coordination. Actively expand and participate in international cooperation in the field of green finance, and expand international influence through multilateral platforms such as sustainable finance international platforms, central banks, and regulatory green finance networks.
