China’s central bank boss on Wednesday warned that the global monetary system could be “weaponised” and politicised by dominant countries, as the country navigates an uneasy trade truce with the United States.
The superpowers said this month they had made progress on points of contention including Beijing’s exports of rare earths and visas for Chinese students in the United States, following marathon talks in London.
But People’s Bank of China chief Pan Gongsheng on Wednesday hit out indirectly at US dominance of international finance infrastructure.
“When the country with the dominant currency’s self-interest contradicts with the global public good, that country will consider its self-interest more,” Pan told a forum in Shanghai.
The dollar is traditionally considered a safe haven in times of crisis or conflict, but the uncertainty created by US President Donald Trump’s sweeping tariffs on virtually all trading partners — most of which were subsequently paused temporarily — have upended global norms.
Pan added that “traditional cross-border payments infrastructure is easy to politicise, weaponise, and use for unilateral sanctions”.
Russia, a friendly nation to Beijing, was cut off from the SWIFT global payments system over Moscow’s war in Ukraine, and China has been pushing the yuan as an alternative medium for payments.
“The international community should also be concerned that individual countries are pursuing unilateralism as a policy direction, interfering in and affecting the governance and operations of international financial organisations,” Pan said.
He reiterated earlier calls for the International Monetary Fund to reform the quota system that determines member nations’ vote shares, saying on Wednesday that the current system does not reflect the state of the world economy.
Global financial organisations should “increase the voice and representation of emerging markets and developing countries”, Pan said.
