{
  "id": 4820383,
  "title": "Why US sanctions threats against China aren’t credible",
  "url": "https://urgent.news/2026/09/01/why-us-sanctions-threats-against-china-arent-credible",
  "topic": "world",
  "section": "World",
  "published": "2026-09-01T08:30:06.000Z",
  "source": {
    "name": "Reuters Business via SCMP",
    "slug": "reuters-business-via-scmp",
    "url": "https://www.scmp.com/opinion/china-opinion/article/3365837/why-us-sanctions-threats-against-china-arent-credible"
  },
  "original_language": "en",
  "account": "Sanctions from the United States on China due to Beijing's ties with Iran are not considered credible. The artificial intelligence boom and the country's unstable bond market make the US more susceptible to shocks than China. Even if the US risks significant self-harm and removes major Chinese institutions from SWIFT, the global messaging system for dollar-based cross-border payments, it could only hasten the yuan's ascent. China's trading partners can readily shift to the efficient yuan payment system, the Cross-border Interbank Payment System (CIPS). The US claiming economic war on Iran is a reflection of its dwindling ammunition for a hot war. The US has imposed economic and financial sanctions on Iran for decades, and now plans to impose secondary sanctions on Iran's trading partners. As China is Iran's principal trading partner, the US is indirectly targeting China. Since US President Donald Trump started the trade and tech war during his first term, roles have reversed: China is now dealing with a massive property bubble and a bloated shadow banking system, while the US economy is inflated with an AI and stock market bubble. The US deficit is ballooning, with total public debt exceeding US$40 trillion, up from US$9 trillion in 2007. A major shock could trigger a financial collapse, and a financial war with China would likely cause such a shock. The US' financial vulnerability and China's resilience make it improbable for the US to initiate an action that could shake its financial system. In a game of chicken, the US would likely back down first. Sanctioning Chinese institutions from the Society for Worldwide Interbank Financial Telecommunication (SWIFT) system, touted as a nuclear option that would collapse the Chinese economy, is unlikely to be effective. With SWIFT access, a bank can easily join CIPS. It is doubtful that anyone will forgo a trading relationship because CIPS is too cumbersome. A SWIFT ban could have unintended consequences, such as countries forced to join CIPS to settle their China trade potentially using it for trade with other nations, thereby undermining the dollar's dominance. Imposing sanctions on banks for using CIPS is possible, but China's role in global supply chains would lead to the shutdown of the global production system. The US financial system would struggle to survive such a scenario. Given the potential fallout, threatening to bar China from SWIFT isn't credible. The status quo, where the US blocks ships to Iran and Iran controls the Strait of Hormuz, is likely to persist for some time. Ultimately, peace will be restored after strategic petroleum reserves and petrochemical industry inventories run out. The pain of high oil prices will eventually lead to peace. As China is the world's largest trading economy, a stable and growing global economy is in its best interest. Therefore, China will respond to US sanctions with some deterrence, but not enough to cripple its economy. While China depends on trade, the US relies on money inflows, which are naturally overvalued given the dollar's reserve currency status. As long as the dollar remains a reserve currency, the US will not be competitive in manufacturing. China and the US are the opposite ends of the global economy's yin and yang. If they coexist, the global economy can function smoothly. If they work against each other, the world will face inflation and liquidity crises.",
  "summary": "The US threat of sanctions on China because of Beijing’s relationship with Iran isn’t credible. The artificial intelligence bubble and its own precarious bond market make the US more vulnerable to a shock than China. Even if the US risks massive self-harm and kicks major Chinese institutions off SWIFT, the global messaging system enabling dollar-based cross-border payments, it will merely…",
  "key_points": [
    "US sanctions on China due to Iran ties are considered not credible.",
    "China's resilient economy and SWIFT alternative make US threats ineffective.",
    "Global economy benefits from stable China-US relationship."
  ],
  "editors_take": null,
  "illustration": null,
  "coverage": {
    "outlets": 2,
    "also_reported_by": [
      {
        "outlet": "South China Morning Post",
        "title": "Why US sanctions threats against China aren’t credible",
        "url": "https://urgent.news/2026/09/01/why-us-sanctions-threats-against-china-arent-credible-4822142",
        "published": "2026-09-01T08:30:06.000Z"
      }
    ]
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}