China is printing money for countries like Poland and Brazil at ‘full steam’ as it tries to expand its influence on the global economy

15-Aug-2018 Intellasia | AFP | 7:13 AM Print This Post

China is printing other countries’ money as it seeks to expand its influence on the global economy.

Money-printing plants across China are running at close to full capacity to meet an unusually high quota set by the government this year, multiple sources from the China Banknote Printing and Minting Corporation told the South China Morning Post.

Chinese yuan notes made up “a small proportion of the orders,” with most of the demand coming from countries participating in China’s Belt and Road Initiative, one source who asked not to be named told the South China Morning Post.

Until recently China did not print foreign currency at all, but in 2013 Beijing launched the Belt and Road Initiative, a plan seeking to stimulate economic growth in about 60 countries in Europe, Africa, and Asia through investment and infrastructure projects.

Two years later China began printing money for Nepal, and today foreign customers of China’s industry now also reportedly include Thailand, Bangladesh, Sri Lanka, Malaysia, India, Brazil, and Poland as well as possibly others that have not been disclosed, a source in the corporation said.

The state-owned China Banknote Printing and Minting Corporation, which is headquartered in Beijing’s Xicheng district, describes itself as the world’s largest money printer by scale with 18,000 employees and 10 plants for printing paper notes and coins.

Its US counterpart, the Bureau of Engraving and Printing, employs fewer than 2,000 people.

China’s attitude toward printing currency marks a change from previous low demand for printing, as Chinese citizens have turned to using their phones rather than cash.

Hu Xingdou, a professor of economics at the Beijing Institute of Technology, told the South China Morning Post that a nation must have considerable trust in the Chinese government to allow it to print its banknotes.

“The world economic landscape is undergoing some profound changes,” he said. “As China becomes bigger and more powerful, it will challenge the value system established by the West. Printing money for other countries is an important step.”

He added: “Currency is a symbol of a country’s sovereignty. This business helps build trust and even monetary alliances.”

Leverage over currency can also be a powerful weapon. During the fall of the Libyan ruler Muammar Gaddafi seven years ago, the British government seized $1.5 billion worth of Libyan dinars originally produced for the dictator by the British currency printer De La Rue, which sparked shortages in the country and put pressure on the state.

Beijing has been concerned that its enemies could use fake notes to disrupt its economy and has viewed the money-printing capability as being as important as its atomic bomb programme.


Category: China

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