China has accused the United States of using the dollar to exert influence and control over other members of the global community.
"The hegemony of the U.S. dollar is the main source of instability and uncertainty in the world economy."
– Chinese Foreign Ministry 🇨🇳 pic.twitter.com/xcfMe6GJYm
— BitKE (@BitcoinKE) February 25, 2023
In a broad ranging article authored by the country’s foreign ministry, China says after World War 2 the United States led efforts to create an international financial centered around its currency, the US dollar, giving it control and influence over other countries.
“By taking advantage of the dollar’s status as the major international reserve currency, the United States is basically collecting “seigniorage” from around the world; and using its control over international organizations, it coerces other countries into serving America’s political and economic strategy,” China says.
Seigniorage is defined as the profit made by a government by issuing currency, especially the difference between the face value of coins and their production costs.
According to China, the United States exploits the world’s wealth with the help of “seigniorage.” “It costs only about 17 cents to produce a 100 dollar bill, but other countries had to pony up 100 dollar of actual goods in order to obtain one,” it says.
Moreover, the United States is blamed for the spate of inflation and currency depreciation that many countries, especially in Africa have experienced in recent times.
“During the COVID-19 pandemic, the United States abused its global financial hegemony and injected trillions of dollars into the global market, leaving other countries, especially emerging economies, to pay the price.”
When the United States Federal Reserve began to raise interest rates following the decline of COVID – 19, other currencies depreciated significantly, including the Euro. Developing nations in particular suffered inflation, currency depreciation, and capital outflows under the strength of the US dollar.
Besides a dollar hegemony, China points fingers at the United States control of top international decision making organs in addition to increasingly relying on sanctions to put down other countries. According to China, US sanctions against foreign entities increased by 933% from 2000 to 2021.
“So far, the United States had or has imposed economic sanctions on nearly 40 countries across the world, including Cuba, China, Russia, the DPRK, Iran and Venezuela, affecting nearly half of the world’s population.”
The post highlights 5 key areas where the United States economic hegemony has caused turmoil to the rest of the world:
- Exploiting the world’s wealth – The US has ‘used the worthless paper note to plunder the resources and factories of other nations.’ It only costs 17 cents to produce a 100-dollar bill
- Instability and uncertainty in the world economy – The US injected trillions of dollars intot the global market during the COVID-19 pandemic. The aggressive interest rate hike that followed up in 2022 has caused turmoil in the international financial market and substantial depreciation of other currencies especially emerging economies
- Control over international financial economic and financial organizations – The US imposes additional conditions for assistance to other countries via organizations like the IMF. In order to ‘reduce obstacles to US capital inflow and speculation, the recipient countries are required to advance financial liberalization and open up financial markets so that their economic policies would fall in line with America’s strategy.’ US does this by extends and attaches additional political conditions to debt relief programs by the IMF to its 131 member countries
- Willful suppression of opponents with economic coercion – This is demonstrated by how the US eliminated the economic threat posed by Japan and control the Soviet Union via the Plaza Accord which required Japan to open up its financial market and reform its financial system. This dealt a heavy blow to the growth momentum of the Japanese economy
- Wielding financial hegemony as a geopolitical weapon – The US has used unilateral sactions and ‘enacted domestic laws such as the the International Emergency Economic Powers Act, the Global Magnitsky Human Rights Accountability Act, and the Countering America’s Adversaries Through Sanctions Act, and introduced a series of executive orders to sanction specific countries, organizations or individuals.’ Statistics show that US sanctions against foreign entities increased by 933 percent from 2000 to 2021. ‘The United States of America’ has turned itself into ‘the United States of Sanctions.’
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