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Thursday, February 16, 4:00-5:30pm R-414b (Democracy Lab)

This study group will explore ways in which China has been working to reshape the framework of its financial engagement with the United States and its allies. In the years following the financial crisis of 2008-2009, China’s leadership has elevated financial and monetary policy to a top priority. It has deployed several specific strategies in support of the broad objective of increasing its global financial influence. China has sought to increase its authority within international organizations such as the WTO, IMF and World Bank, while also working to create new institutions it can control. It has developed new cross-border payment systems. China has used bilateral currency swap arrangements and financial transactions as well as regional economic agreements to encourage RMB-based trade. It has become a leader in the development of central bank digital currencies. China is also working to de-dollarize its foreign currency reserves.

To date, the United States has not developed a comprehensive, effective strategy for managing its financial engagement with China. Arguably, the U.S. response to China’s efforts to internationalize the RMB and develop alternative payment systems that do not rely on the USD has been too weak. The United States needs to develop a comprehensive financial engagement strategy that will affirm its interests and values, demonstrate its economic leadership and promote a stable relationship with China.

We will explore some of the core components that might support a more effective U.S. strategy. For example, we will consider ways to maintain the USD as a strong reserve currency, measures to reduce the use of sanctions as a financial foreign policy tool, steps to modernize SWIFT, the possible use of different types of digital currencies, and efforts to reinforce constructive market connections with China.

This study group / discussion is open to all. Registration is not necessary.

M-RCBG welcomes individuals with disabilities to participate in its programs. To request accommodations or ask questions about access provided, please email: mrcbg@hks.harvard.edu

Connie M. Friesen was a partner in the Banking and Financial Services Group at the global law firm of Sidley Austin LLP from July 1999 until her retirement at the beginning of 2021. Prior to joining Sidley Austin LLP, she worked as an associate and partner at other major U.S. law firms exclusively in the area of financial services regulation, with a focus on international banks and their U.S. operations. Connie has particular interest and expertise in the cross-border regulation and supervision of international banks. Throughout her career, she has provided advice to a wide variety of financial institutions on issues relating to key legislative and regulatory initiatives such as the International Banking Act, the Bank Holding Company Act, the USA PATRIOT Act, the Dodd-Frank Act, and cybersecurity, data privacy and fintech regulations, among others. Connie has counseled financial institutions on compliance with U.S. domestic and international anti-money laundering (AML) laws, the development of new financial services, mergers and acquisitions and the specific implications of various federal and state banking regulations. She has also advised banks on the appropriate responses to pending and actual regulatory enforcement actions and assisted financial institutions in developing comprehensive global compliance and corporate governance programs. She has worked with international banks, including banks from the PRC and other Asian countries, planning to open branches, agencies, representative offices, broker-dealers and finance companies in the United States. Connie’s work has included a number of major AML, sanctions and anti-corruption projects for international financial institutions and advice to the government-appointed monitor for a global bank with operations in over 70 jurisdictions around the world. These projects have provided opportunities to evaluate many different public policy and regulatory approaches intended to promote good corporate governance and risk management while sustaining appropriate business expansion. She holds a Ph.D. in Government from Harvard University and a J.D. from the Yale Law School. As a Senior Fellow at M-RCBG, Connie’s research will be on U.S. policy regarding the entry, expansion and oversight of Chinese financial institutions. Her faculty sponsor is Hal Scott, Adjunct Professor of Public Policy at Harvard Kennedy School and Emeritus Nomura Professor of International Financial Systems at Harvard Law School. Email:cfriesen@hks.harvard.edu