US Senators have expressed concerns over China's expanding role in the American financial system, citing potential risks to personal identifiable information (PII). Led by Senators Tim Scott and Mike Crapo, a group of lawmakers sent a letter to Treasury Secretary Janet Yellen and United States Trade Representative Katherine Tai, outlining their concerns about the Chinese Communist Party's (CCP) increasing influence in the US financial system and global payments market.
In the letter, the senators argue that the CCP's actions undermine US foreign policy, jeopardize the privacy of Americans' financial and consumer data, and violate international trade practices. They specifically request that the Department of the Treasury and the United States Trade Representative closely examine the CCP's involvement in US payment networks, particularly in relation to the security of Americans' PII.
The senators highlighted China's aggressive pursuit of a global leadership role in financial standards setting, with the aim of reducing global dependence on the US dollar. They pointed out that China's Cross-Border Interbank Payment System (CIPS) is being positioned as an alternative to the Society for Worldwide Interbank Financial Telecommunications (SWIFT), a critical messaging system used by banks worldwide.
The letter also noted the rapid global expansion of China's state-owned payment system, UnionPay. In 2022, UnionPay became the largest global payments network by total volume, with over 80% of US merchants and 90% of automated teller machines in the US now accepting UnionPay cards.
Furthermore, the senators raised concerns about the lack of reciprocal market access for US payment providers in China. They highlighted that China had committed to phasing out restrictions on financial services as part of its 2001 admission to the World Trade Organization (WTO), but this commitment remains unfulfilled. Despite a 2012 WTO ruling against China, the senators argue that China's market access restrictions continue to disadvantage US payment providers.
The senators have called for a comprehensive review to identify any potential gaps in U.S. sanctions authority resulting from the CCP's financial expansion. They also urge for measures to ensure that U.S. payment providers are not disadvantaged by China's "reckless disregard for international agreements."
The senators' letter reflects growing concerns among US lawmakers about China's increasing influence in the American financial system. They are calling for a closer examination of the potential risks to personal identifiable information and the need to address China's market access restrictions.