According to www.scmp.com, the US threat of sanctions against China over Beijing’s ties with Iran lacks credibility due to America’s acute financial vulnerabilities.
US Financial Fragility Undermines Sanction Leverage
The United States’ capacity to impose coercive financial measures is constrained by its own mounting fiscal and market risks. As total US public debt tops US$40 trillion, up from US$9 trillion in 2007, bond yields are surging to 2007 levels. The US must refinance bonds worth US$9 trillion and issue an additional US$2.1 trillion to cover the current fiscal deficit — a precarious position that heightens sensitivity to external shocks.
Stock market capitalisation has reached 240 per cent of gross domestic product — exceeding levels seen in 1987, 2000, and 2007. This artificial intelligence–fueled equity bubble, combined with ballooning deficits, renders the US economy more vulnerable to disruption than China’s, according to the report.
The source states that a financial war with China would trigger precisely the kind of shock needed to precipitate a collapse — making such action strategically self-defeating. In a game of chicken, the US will blink first.
China’s Resilience Contrasts With US Exposure
China has demonstrated structural resilience since President Donald Trump launched the trade and tech war during his first term. At that time, Beijing faced a massive property bubble and a bloated shadow banking system — both of which were successfully deflated without triggering a major economic downturn.
Today, while China’s growth rate is muted, the economy remains robust enough to absorb sustained US pressure. The report notes that China has so far avoided recession despite repeated US sanctions in trade and technology domains.
Moreover, China’s Cross-border Interbank Payment System (CIPS) offers a fully functional alternative to SWIFT. Even if the US were to cut major Chinese institutions off SWIFT — the global messaging system enabling dollar-based cross-border payments — China’s trading partners could easily switch to CIPS, accelerating the yuan’s international adoption.
Iran Sanctions Signal Strategic Exhaustion
The US campaign to impose secondary sanctions on Iran’s trading partners reflects dwindling options for conventional military escalation. Having imposed economic and financial sanctions on Iran for decades, Washington now targets third-party actors — effectively singling out China, Iran’s largest trading partner.
The report underscores that China is already “in the crosshairs of US politicians, with or without Iran.” Consequently, Beijing has no incentive to yield to additional pressure — especially when the US threat carries high risk of massive self-harm.
Source: South China Morning Post
Compiled from international media by the SCI.AI editorial team.
