The financial watchdog in China has spelled out a caution that the dominance of the US dollar and the high stimulus started by the Federal Reserve has pushed the world to the brink of yet another financial crisis. The chairman of the China Banking Regulatory Commission, in an uncharacteristic way, has lashed out at some of the developed nations as they attempt to divert the attention from their failures by concentrating more on the efforts by the US to blacklist Chinese firms.
The US dollar mostly dominates the international monetary system. The financial experts contend that the unprecedented easing policy of the US will contribute to the erosion of the foundation of the world economic stability. There is a clear indication that the world will be pushed to a worldwide financial crisis.
The relations between the US and China, the two major superpowers of the world, have gone downhill over the past few weeks concerning various issues like coronavirus, commerce, financial coverage, etc. The politicians of both countries are opposed to each other over multiple topics, such as the crackdown on Hong Kong by Beijing. China’s monetary system is in a sort of mess as, after the pandemic, the asset quality will go down after the ongoing mortgage classifications.
It is a known fact that the earnings of the bank on paper are pretty inflated. As the number of unhealthy loans has increased, the combined profits of more than 1000 business banks in China have slumped drastically. The lenders have been advised by the authorities to sacrifice to the tune of USD 211 billion to overcome the worst financial drop in almost four decades. China has decided to go ahead with the opening up of the monetary markets to Wall Street corporations and various international lenders but has vowed that the country’s financial sovereignty would be protected.