The Boao Forum for Asia was held in Boao, Hainan, where the heads of state and the secretary-general of the 10 ASEAN countries gathered to discuss the major plans of Asian economic integration and financial security. ASEAN Secretary-General Ko Kim Hong announced that ASEAN will promote local currency settlement and reduce dependence on the US dollar in response to US financial hegemony and sanctions.
How did the financial hegemony of the United States come about?
The financial hegemony of the United States is based on the status of the US dollar as the global reserve currency and settlement currency. The United States can raise unlimited financing by issuing dollar bonds without worrying about balance-of-payments imbalances. The United States can also influence the global financial market and monetary policy through the Federal Reserve's interest rate hikes and interest rate cuts, so that other countries have to follow the United States and ignore their own domestic economic needs.
The United States also controls international financial institutions, such as the International Monetary Organization and the World Bank, as well as international payment systems, such as SWIFT, to develop and enforce international financial rules in favor of the United States, sanctioning and punishing countries that do not obey.
What is the impact of US financial hegemony on ASEAN countries?
The financial hegemony of the United States has caused enormous pressure and risks to ASEAN countries. ASEAN countries have the majority of their foreign exchange reserves in US dollars, which makes their economies vulnerable to fluctuations in the US dollar exchange rate and the impact of US financial policies. For example, the Southeast Asian financial crisis of 1998 was caused by the depreciation of the currencies and capital outflows of ASEAN countries due to the appreciation of the US dollar and the interest rate hike by the Federal Reserve.
U.S. financial hegemony has also limited the economic development and autonomy of ASEAN countries. ASEAN countries** and investments need to be settled in US dollars, which makes their economic activities subject to US surveillance and interference. The United States can also interfere in the internal affairs and diplomacy of ASEAN countries through sanctions and threats, such as sanctions against Russia, which make ASEAN countries feel uneasy.
U.S. financial hegemony also deprives ASEAN countries of benefits and opportunities. By buying U.S. Treasury bonds, ASEAN countries are using their wealth to support U.S. fiscal deficits and military expansion. When companies from ASEAN countries go public in the United States, they are tantamount to handing over their innovation and competitiveness to the U.S. regulation and market. The resources and markets of ASEAN countries are also exploited and plundered by US companies and capital.
How can ASEAN countries get rid of US financial hegemony?
ASEAN countries realize that in order to get rid of the financial hegemony of the United States, they must promote local currency settlements and establish their own financial systems and rules. In this way, they can protect their financial security, enhance their economic power, and enhance their international standing.
To this end, ASEAN countries have put forward a series of measures and plans at the Boao Forum for Asia. These include:
Promote Asian economic integration and accelerate the China-ASEAN Free Trade Area3The 0 version of the negotiations provides new momentum for the economic growth of both sides.
Promote financial integration, abandon the use of Western currencies such as the US dollar, use ASEAN regional or East Asian currencies for settlement, establish digital system agreements, and realize currency swaps and payment interconnection.
Stop using the SWIFT payment system of the United States, prevent US sanctions and interference, and protect the security and autonomy of financial transactions.
Strengthen financial cooperation with China and promote the internationalization of RMB by using China's Cross-border Payment System (CIPS) to settle in RMB.
These measures and plans will help ASEAN countries break the financial trap of the United States, achieve financial freedom and independence, and create more possibilities for their own economic development and social progress.
How will China benefit from this?
As ASEAN's largest partner and closest neighbor, China will benefit greatly from ASEAN's financial reforms. China will:
Strengthen economic and trade cooperation with ASEAN, expand the scale and scope of the free zone, and improve the openness and mutual benefit of the market of both sides.
Strengthen financial cooperation with ASEAN, promote the internationalization of the RMB, improve the credibility and liquidity of the RMB, and reduce exchange rate risks and settlement costs.
China will strengthen strategic cooperation with ASEAN, jointly safeguard peace and stability in Asia, jointly respond to US hegemony and sanctions, and jointly build a community with a shared future in Asia.
In short, the financial cooperation between China and ASEAN will bring more benefits and opportunities to both sides, make greater contributions to the development and prosperity of Asia, and set a better example for the multipolarization and diversification of the world. As a Chinese, I am proud and happy about the friendship and cooperation between China and ASEAN!