China Global Payments Market Threat Cited

A group of Senate Republicans are calling on the Administration to confront China’s growing market share in the US financial system and global payments market.   

In a letter to Treasury Secretary Janet Yellen and US Trade Representative Katherine Tai, the senators urged the Administration to "closely examine the infiltration of Chinese payments networks into the United States, ensure payment providers are not disadvantaged by China’s disregard for international agreements and conduct a review of any potential gaps in US sanction authority created by Beijing’s expansion of its Cross-Border Interbank Payment System."

“The measures the CCP is taking undermine U.S. foreign policy, threaten Americans’ sensitive financial and consumer data privacy, and violate international trade practices,” the senators wrote.

“It is no secret that the CCP seeks to secure a global leadership role in the setting of financial standards and to reduce the world’s reliance on the U.S. dollar. [...] Therefore, efforts by the CCP to infiltrate the U.S. financial system must be met with extreme scrutiny.”

The senators noted that China does not offer reciprocal market access for the rights it secures in other countries. “In fact, for over two decades, the CCP has been obstructing a World Trade Organization (“WTO”) agreement to allow U.S. payments providers to compete on fair terms with the CCP’s card service provider, UnionPay. In 2001, as a part of China’s admission to the WTO, it committed to progressively phase out restrictions on financial services. Twenty-two years later, the CCP has still not met those promises, despite an adverse 2012 ruling that it breached WTO rules. The unfair treatment of U.S. companies paired with the rapid growth and presence of UnionPay in the U.S. marketplace must be considered and responded to appropriately.”

UnionPay has the largest share of global card expenditure, with 45%. This is largely driven by spending in China, the world’s largest market, where UnionPay accounts for 93% of the total.  

Signing the letters are Republican Sens. Tim Scott (SC), Mike Crapo (Idaho), Kevin Cramer (ND), Mike Rounds (SD), Thom Tillis (NC), John Kennedy (La), Bill Hagerty (Tenn), Cynthia Lummis (Wyo), JD Vance (Ohio), Katie Britt (Ala) and Steve Daines (R-Mont).