Author: Sima Nan Channel Zhiyuan
Recently, the U.S. Senate included an amendment in the just-passed $1.7 trillion budget draft. The bill is clear in content, allowing the assets of frozen Russian businessmen to be confiscated and transferred to Ukraine in the form of humanitarian and military assistance. This kind of blatant confiscation of personal assets is obviously rubbing the so-called spirit of contract in the United States and even the West to the ground. It also makes the self-proclaimed inviolability of personal property in the West look like a joke.
It is reported that in the budget draft for fiscal year 2023 passed this time, the United States is expected to invest US$45 billion in various types of assistance to Ukraine to help the Ukrainian army resist Russian pressure. I thought that all the US$45 billion would be paid for by the United States on its own initiative, but I didn't expect that the Biden administration and members of Congress would be so stingy. They would directly sell off Russian assets and use them to provide aid to Ukraine. It was a typical act of borrowing flowers to give to Buddha, while minimizing the United States' own investment.
I have to say that the United States’ calculation this time is indeed very shrewd. But this kind of violation of rules is obviously likely to trigger a larger chain reaction. First, EU may be followed by confiscation of Russian assets. Since the conflict between Russia and Ukraine, Western countries have frozen most of Russia's overseas assets. Among these frozen assets, the EU has the largest share due to its close trade with Russia in the past. It is reported that the European Union has frozen up to 300 billion euros in assets of the Russian Central Bank, and it is difficult to specifically count personal assets. With such huge wealth, coupled with the increasing pressure from the EU to assist Ukraine, European Commission Chairman von der Leyen has already repeatedly called for the confiscation of Russian assets. Based on this background, the United States took the lead in confiscating the assets of Russian businessmen, and it is very likely that the EU will also take action on individuals first.
Second, Russia may take reciprocal countermeasures or more severe trade countermeasures. From the current point of view, Western countries do not dare to openly make trouble with the assets of Russia's central bank. Instead, they first make a fuss about the assets of Russian individuals. Although some businessmen here betrayed Russia and had their assets confiscated at their own fault, other businessmen were obviously a little unlucky. In this case, it is entirely possible for Russia to take reciprocal countermeasures and confiscate the assets of Western countries in Russia to make up for the losses. What's more important is that Russia can also take more severe trade countermeasures to make the West feel Russia's anger. For example, just recently, Russia has officially made it clear that it will not sell oil to countries that comply with oil price limits. This move will inevitably affect energy inflation in Western countries and even the world, and its lethality cannot be underestimated.
Third, the credit system of the international community will collapse at an accelerated pace. In the past, due to the high prosperity of trade globalization , global industrial flows, capital flows, and personnel flows were very rapid. Behind this, countries around the world were willing to play according to the rules of the game, and all parties were more trustworthy. However, now, as the United States takes the initiative to break the rules of this game, the trust that has been built with great difficulty in the past decades is likely to completely collapse. Specifically, if the United States confiscates the assets of Russian businessmen this time, if Western countries led by the United States really do this, then who else would dare to invest in the United States easily, and who would put their assets there to be harvested by the United States at any time? Therefore, this kind of serious violation of rules will inevitably have a very negative impact on future trade globalization. Judging from the current situation, the Biden administration obviously does not care about this.
Of course, this wave of operations by the United States has actually sounded a wake-up call to China. Currently, as China's One Belt One Road policy becomes more and more prosperous, many Chinese companies and individuals have purchased a large number of high-quality assets overseas. Now that Western countries dare to freeze and confiscate Russian assets without following rules, it is entirely possible that they will copy the same routine to China.And as China's rise becomes more and more unstoppable, this risk is also increasing. Therefore, it is even more important for us to prepare for a rainy day and prepare countermeasures.
