China has been printing foreign currencies on a massive scale, including India which is the world’s second-largest producer and consumer of currency notes, as per a report in Chinese media. According to a report in the South China Morning Post, most of the demand for China is coming in relation to their “Belt and Road Initiative.” The Belt and Road initiative involves 60 countries from Asia, Europe which plans to stimulate economic growth with the help of infrastructure and other projects.
Shashi Tharoor tweeted that if this is true, it can have disturbing national security implications. Not to mention making it easier for Pakistan to counterfeit.
Many countries such as Denmark prefer to outsource the printing of their currency due to the cost involved. For producing currency notes fine cotton and linen fibres are first turned to pulp. It is then changed into high-quality money paper with watermarks for anti-counterfeiting. The whole printing process is costly considering it involves special inks, security features, among others.
India imports watermarked paper for currency notes from companies such as Germany’s Giesecke & Devrient and Britain’s De La Rue.
The article in China Media, states, “In China, the rise of mobile payments in recent years has significantly reduced the use of and demand for banknotes. From big cities to remote villages, smartphones have become wallets, with most transactions in grocery stores now carried out digitally, leaving many printing plants short of work. But the resulting lull ended suddenly earlier this year.
The nation’s largest currency paper mill in Baoding, Hebei province, sprang into action with the sudden arrival of “big orders”, according to an employee working in the 604 Factory, a subsidiary of the corporation.”
Liu Guisheng, president of the China Banknote Printing and Minting Corporation, was quoted as saying that China did not print foreign currency until recently. He further said, 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.”