China printing foreign currencies on huge scale, secures contracts for production from Belt-Road countries: Report

China is printing foreign currencies on a massive scale to build its influence on other economies and the currency printing plants in the country are running at near full capacity, according to a report. Most of the demand for printing, according to a report in South China Morning Post, comes from members of China’s Belt and Road Initiative (BRI) and Beijing’s own currency only forms a small proportion of the orders. Liu Guisheng, president of the China Banknote Printing and Minting Corporation, told South China Morning Post that China did not print foreign currency until recently. Two years after China launched the Belt and Road Initiative, it started printing the currency for Nepal, Liu wrote in an article in China Finance. Since then the company had “seized the opportunities brought by the initiative” and “successfully won contracts for currency production projects in a number of countries including Thailand, Bangladesh, Sri Lanka, Malaysia, India, Brazil and Poland,” he told South China Morning Post. Congress leader Shashi Tharoor took note of India’s mention in the report and said that if true, it would make it easier for Pakistan to counterfeit notes.

If true, this has disturbing national security implications. Not to mention making it easier for Pak to counterfeit. @PiyushGoyal @arunjaitley please clarify! https://t.co/POD2CcNNuL

— Shashi Tharoor (@ShashiTharoor) August 12, 2018

Hu Xingdou, a professor of economics at the Beijing Institute of Technology, told South China Morning Post that currency is a symbol of a country’s sovereignty and “this business helps build trust and monetary alliances.” In 2016, Nepal granted the contract to to print 200 million 1,000-rupee notes to China Banknote Printing and Minting Corporation. The first batch was delivered to Kathmandu last year. Bhuban Kadel, executive director of Nepal Rastra Bank said the printing cost in China was lower. “The quality is as good as the ones printed earlier in another country but the cost is less than half of the amount we had earlier paid,” Kadel told Xinhua. The same Chinese company had earlier printed Nepal’s 100 rupee notes as well. Nepal had earlier been getting its notes printed by Indonesian, French and Australian companies among others. According to a Slate report from 2011, between 10 and 20 percent of all bank notes around the globe are printed by private companies, which include UK’s De La Rue, the Canadian Banknote Company, Giesecke and Devrient in Germany. The report stated that Singapore, Finland, Sweden, Bahrain, and Qatar are known to outsource all of their printing and also mentioned India. The RBI had in 1997-98 outsourced printing of 2,000 million pieces of Rs 100 notes and 1,600 million pieces of Rs. 500 notes to countries like the UK, US and Germany, The Times of India said in a report. When it became public in 2010, a parliamentary committee had expressed shock at the government’s decision and said that it put the “entire economic sovereignty (of the country) at stake” during that particular period, the report added.