An excerpt from Mehmet Emin Hazret’s book “Rising Walls: The Global Cost of the U.S.-China Economic Conflict“
In recent years, China has increasingly accused the United States of sabotaging the rules of free trade. Chinese officials have especially framed U.S. restrictions on high-tech sectors, tariffs, and sanctions as “protectionist policies,” blaming the U.S. for disrupting the global order.
But an important question must be asked: Is the real saboteur the United States? Or is it China?
Who Is Sabotaging the System?
China’s approach to the free trade system reveals a significant gap between its promised reforms and its actual practices.
When China joined the World Trade Organization in 2001, it committed to allowing its currency, the Renminbi, to float freely and to liberalize its foreign exchange market.
In this context:
In 2004, China gave official assurances to then U.S. Treasury Secretary John Snow and Federal Reserve Chairman Alan Greenspan that it would transition to a system in which the value of the Yuan would be determined by market forces.
However, as we approach 2026, China has still not fulfilled this promise. The Renminbi remains tightly controlled and is subject to strong government intervention.
China’s Manipulation Strategy
By manipulating its exchange rate, China has kept its exports cheap, gaining an unfair advantage in global markets. This has significantly distorted the trade balance with the U.S.
As of 2023, China’s annual trade surplus with the United States reached $382 billion. This is not merely an economic gain—it represents a structural disruption that affects the direction of global capital flows.
Since the mid-2000s, China has accumulated over $3 trillion in foreign exchange reserves. While much of this has been invested in U.S. Treasury bonds, these reserves have occasionally been used as tools of geopolitical pressure.
The IMF and the SDR Reality
In 2016, the International Monetary Fund (IMF) added China’s Renminbi to its Special Drawing Rights (SDR) basket. This was a major step in integrating China into the international monetary system.
However, despite this IMF move, China has still not taken clear steps toward a free market. In fact, in certain years, China deliberately devalued the Yuan to gain artificial competitive advantage in the currency market.
Media Wars and the Search for Blame
Today, using its media power and its narrative of a “China-style globalization,” China attempts to deflect blame by accusing the U.S. of protectionism. But the reality is quite different:
China, which promised to integrate into the free market system but continuously violates its rules, represents a textbook case of “internal sabotage” from within the global financial architecture.
The New Front: Digital Yuan, Crypto Bans, and SWIFT Alternatives
China has not only manipulated the traditional financial system for years, but recently it has begun leveraging technology to construct an alternative global financial order.
Digital Yuan (e-CNY) – A Centralized Alternative
China launched its Central Bank Digital Currency (CBDC), the Digital Yuan, as a pilot in 2020 and by 2023 it was in active use in major cities.
While it appears to use blockchain technology, the system is fully centralized and state-controlled.
One of its key goals is to make all monetary flows traceable. But externally, it aims to reduce dependency on the U.S. dollar and serve as an alternative payment instrument in international trade.
China has tested Digital Yuan-based transactions with trade partners—particularly with countries like Russia and Iran that face Western sanctions.
Harsh Bans on Cryptocurrencies
While promoting the Digital Yuan, China has completely banned Bitcoin and other cryptocurrencies.
In 2021, it shut down all crypto mining activities across the country. Shortly thereafter, cryptocurrency trading was declared illegal.
This seemingly contradictory stance actually reflects China’s deep distrust of unregulated financial tools and its unwillingness to allow the development of systems outside state control.
Seeking an Alternative to SWIFT: The CIPS System
China has expressed discomfort with the U.S.’s use of the SWIFT system as a geopolitical tool. As a result, it developed its own international payment network, CIPS (Cross-Border Interbank Payment System).
By 2023, over 1,300 financial institutions had joined CIPS. However, it is still far from being as widespread as SWIFT.
China is particularly working to increase CIPS usage in agreements with BRICS countries.
In Pursuit of a New Financial Order
These developments indicate that China is not only rejecting the current system, but also actively working to build its own. In doing so, it aims to create a new sphere of influence over the global economy.
From building a defense mechanism against U.S. sanctions, to attempting to break the dominance of the dollar, to striving for 100% control over data and money, China is driving a paradigm shift in the global financial order.
However, this strategy is far removed from the values of a free market and is leading toward a model that is “seemingly free, but functionally controlled.”
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