Beijing’s political, economic moves at Winter Olympics

The 2022 Winter Olympics were launched in Beijing on a defiant note. First, the games are being held under the shadow of Covid-19, even as the pandemic surged in several cities in the last six months and the Chinese government had to impose strict lockdowns in these places to contain the virus.

The 2020 Tokyo Olympics held last August too were under the Covid-19 shadow, and there was intense criticism of the Japanese government in the country. In China, it is a different scenario, with the focus on managing the games. But there is also a sharp political overtone to the Beijing games well, very different from 2008 Beijing Olympics. This time round, relations between China and the United States, the two big economies at the top in terms of their size, are tense, at the diplomatic level. The US has boycotted the games because of Beijing’s policy of discrimination against Uighur Muslims in the Xinjiang province. But the presence of Russian President Valdimir Putin at the opening of the games along with Chinese President Xi Jinping sent out a clear political statement to the US and its European allies. The crisis in Ukraine is nearly on the boiling point, with the US threatening sanctions against Russia if there were to be a Russian invasion of Ukraine. President Xi declared his support for Russia on the Ukrainian issue and backed Putin’s demand that Ukraine should not join Nato, a western military alliance targeting Russia. Indian diplomats did not attend the opening ceremony of the games because of a soldier-athlete from China’s People’s Liberation Army (PLA), which was engaged in a pitched encounter with the Indian army in Galwan, at one of disputed borders between the two countries.

But the most interesting aspect of the games is the use of China’s digital currency, e-CNY, the first of its kind in the world. The international athletes can pay through e-CNY, Visa or cash. All Chinese officials and athletes at the Games Village will be using the digital wallet of e-CNY, to make payments.

At a time when the world economy is faced with the phenomenon of cryptocurrencies and how to deal with them, China has made some clear decisions. It has banned the use of cryptocurrencies in China, and its central bank has issued the digital currency, e-CNY. People’s Bank of China has apparently mooted the idea of a digital yuan as far back as 2014. In January, there were 261 million people who registered for the digital yuan wallet. It is reported that China has done a pilot test of the use of digital yuan in the run up to the games and recorded 9.6 billion CNY (US$1.5 billion) by the end f 2021. China had planned to use the digital yuan with the foreign visitors to the game.

But Covid-19 has disrupted the plan. But China is spreading its use in the country. But e-CNY remains a mode of digital payment, competing with Alibaba’s Alipay and Ten Cent’s We Chat Pay. It is reckoned that CNY will grab a domestic market share of nine per cent by 2025. Alipay and We Chat Pay dominate the digital payment market with a 90 per cent share.

Shanghai-based consultant Richard Turrin and author of “Cashless: China’s Digital Currency Revolution” told Al Jazeera, “Today’s China has become highly digital and cashless for Chinese people, but there are no systems available to connect foreign credit cards.”

Even if the Chinese government extends the reach of digital yuan to foreign credit cards, foreign governments are quite suspicious of the move because China’s dominant position in the world economy and the lack of transparency in the Chinese financial system. But Beijing is not waiting for the Western embrace of CNY.