- cross-posted to:
- world@quokk.au
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China has ordered its companies to ignore US sanctions, an unprecedented act of defiance that threatens to trap (!) a vast banking sector in the crossfire as tension rises between the world’s largest economies.
Won’t somebody think of the banks?
Within China, state media outlets and academics who advise the government sought to frame the retaliation as a forceful but calibrated response against US overreach. A commentary on the People’s Daily app, the Communist Party mouthpiece, called it “a pivotal step” in using [a legal order] to restrain what it called the “long-arm jurisdiction” of the US.
Says the capitalist-run mouthpiece of Wall Street.
Workarounds for banks can include transactions in the yuan, which makes them less visible to US authorities.
What authorities? Who the fuck in the US has authority over trade between China and Iran?
The US measures unlawfully restrict normal trade with third countries and breach international norms, the country’s Commerce Ministry said in a statement on Saturday. It banned recognition, enforcement, and compliance with the sanctions aimed at the five companies.
“The Chinese government has consistently opposed unilateral sanctions that lack authorization from the United Nations and a basis in international law,” the department said.
Half way through the article until they finally quote anyone from the Chinese government.
Oh yeah the framing is hilarious, but the significance here is huge. What this comes down to is that companies and countries have to choose whom to do business with. Do they respect US sanctions or Chinese ones. And since China is a far more important trade partner for majority of the world, it’s pretty easy to guess which way most will swing. On top of that, as the article points out, we’re going to see more dedollarization as a result since the easiest thing to do will be to just transact in yuan and make it opaque for the US.
Yep. Why would an oil refinery choose to stop accepting Iranian oil just to maintain the good graces of the US? This is probably just another, but very significant, test balloon in the march towards dedollarization.
I get the impression that Americans are still acting on the assumptions of being the indispensable economy and controlling the global financial system. But that’s no longer the case, and the only economic power the US has nowadays is being a large consumer market. However, as it goes into a recession the consumption drops which removes the only leverage the US still had.
