South China Morning Post (June 21) reported that China Securities Regulatory Commission Vice Chairman Fang Xinghai warned that China needs to guard against the risk of the US cutting it off from the dollar payments system. He is reported to have said “Such things have already happened to many Russian businesses and financial institutions” and “We have to make preparations early – real preparations, not just psychological preparations.”  He emphasised that “Yuan internationalization is a must to offset external financial pressure.”

(Comment: While Fang Xinghai does not appear to be predicting that the US will use access to the dollar as a weapon against Beijing, he is anticipating that US-China relations will continue to deteriorate, with uncertain consequences.)