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Sep 29

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Naval Build-Up: U.S. Modernizes Fleet While China Surges Ahead in Shipbuilding

As China scales ship production and the U.S. ramps its naval modernization amid war games in the South China Sea, the balance of power is shifting — with major implications for global money, trade, and military finance.

China’s Shipyard Dominance & Technological Leap

China now accounts for over half of all global ship orders by tonnage in the first eight months of 2025, confirming its dominance in commercial and dual-use shipbuilding – despite U.S. port fees targeting Chinese vessels.
The aircraft carrier Fujian launched a stealth fighter using an electromagnetic catapult — a capability previously almost unique to the U.S. Navy. This reflects not just quantity, but technological maturity.
China’s latest naval project, the amphibious assault ship Type 076 “Sichuan”, is designed to carry drones and launch them with EMALS-like systems; it is preparing for sea trials.

U.S. Response: Modernization, Fees, and Strategic Rebalancing

The U.S. is pushing port fees on Chinese-built vessels entering U.S. ports, raising the cost for vessels tied to Chinese shipyards, in part as a way to counter China’s maritime dominance.
U.S. naval modernization includes investing in shipyards, increasing production, and improving warship technology, although several reports warn of weaknesses: maintenance backlogs, supply chain delays, workforce shortages.

War Games & U.S.-China Confrontations in the Sea

Recent U.S. war games and exercises in the South China Sea, often with allies, serve both as deterrence and as demonstrations of logistical capacity and naval readiness — key in projecting both power and securing supply lines.
China, meanwhile, is performing its own naval drills, advancing capabilities in drone warfare, early warning aircraft, and carrier operations. The potential for escalation exists, but much also depends on who controls the maritime routes.

How This Fits Into Broader Global Restructuring

🔹 Industrial Capacity as National Security Asset
▪️ China's state-supported industrial base allows it to produce commercial and warship assets at scale and speed. Those shipyards are dual use: supporting merchant fleets, but also military expansion.
▪️ U.S. is trying to revive its shipbuilding industrial base — not just for defense, but because industrial strength impacts trade balance, employment, and technological leadership.

🔹 Financial & Trade Levers in Strategic Competition
▪️ Port fees on Chinese-built vessels are not just trade policy — they are financial instruments used to shape economic dependencies and shift investment flows.
▪️ Countries ordering ships, choosing ports, or contracting shipyards are effectively making strategic financial decisions: where capital flows, where alliances are strengthened, where supply chains are trusted.

🔹 Alliance Behavior & Global Military Finance
▪️ U.S. war games with allies amplify defense costs: joint training, combined procurement, shared technology development. Funding these requires investment, debt, subsidies, which influences national budgets.
▪️ China’s activities press other nations to reexamine their naval and maritime strategies; they may feel compelled to invest more in defense or align more closely with China or the U.S. for protection, trade guarantees, or port access.

Key Implications

Countries dependent on shipping or maritime trade must now consider which naval power controls the routes, how fees or sanctions could affect shipping costs, and what defense guarantees they will need.
U.S. policy is beginning to treat industrial capacity (shipyards, ports, naval tech) not just as defense, but as essential infrastructure in geopolitical competition.
The speed and scale of China’s shipbuilding challenge the assumption that the U.S. can remain structurally dominant without major reform, funding, or alliances.

Why This Matters
The naval build-up is not just about ships or war games. It’s about which nations control maritime commerce, technological platforms, and industrial capacity. How trade gets routed, which currencies are used in ship finance, who builds warships and their supply chains — all this will reshape political and financial systems of power globally.

This is not just politics — it’s global finance restructuring before our eyes.

@ Newshounds News™ Exclusive

Sources:

Reuters – China shipyard orders strong despite U.S. port fees on Chinese vessels Reuters
Business Insider – China’s newest aircraft carrier, Fujian, launches stealth fighter with EMALS Business Insider
Reuters – Trump’s port fees will weaken China’s shipbuilding dominance Financial Times
South China Morning Post – Type 076 “Sichuan” ship enters trials South China Morning Post
Reports on U.S. shipbuilding weakness: Business Insider analysis Business Insider
Reuters – US targets China’s global ports as part of maritime strategy Reuters
Congressional Research Service – China Naval Modernization: Implications for U.S. Navy capabilities Congress.gov

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SWIFT’s Blockchain Push vs. Ripple/XRP: Competition in the Cross-Border Payments Arena

As SWIFT pivots toward blockchain and tokenization, Ripple/XRP’s fast, low-cost rails present a parallel model — both are part of a broader reshaping of how value moves globally.

SWIFT’s Prototype with Consensys: Modernizing the Backbone

SWIFT is developing a shared blockchain ledger in partnership with Consensys, aimed at improving cross-border payments among global banks. The prototype will test tokenized assets (including stablecoins), enforce transactions with smart contracts, validate sequencing, and improve transaction cost transparency.
Key participating banks include Bank of America, Citigroup, NatWest, Deutsche Bank, HSBC, JPMorgan Chase, etc. Swift’s goal: offer 24/7 instant, always-on cross-border transactions with predictable pricing and speed.

Ripple / XRP: Already Operating at the Edge of Innovation

Ripple’s XRP Ledger (XRPL) settles many transactions in 3-5 seconds at very low fees (< $0.01), especially in remittances and low-value cross-border flows. In contrast, traditional SWIFT transfers can take days and cost tens of dollars.
Ripple’s model (On-Demand Liquidity, use of XRP as a bridge currency) sidesteps needs for pre-funded nostro/vostro accounts, reducing capital tied up in cross-border transfers.

Where SWIFT and Ripple Overlap, Diverge, and What’s at Stake
🔹 Overlap / Convergence
▪️ SWIFT inserting blockchain rails into its messaging infrastructure suggests it recognizes the same pain points Ripple has long highlighted: high fees, delayed settlement, opaque fees.
▪️ The tokenization of assets and stablecoins, which SWIFT’s prototype supports, is a terrain where Ripple already has products (like its RLUSD stablecoin) and experience.

🔹 Key Differences
▪️ Scale vs. agility: SWIFT has a vast global network of ~11,000+ financial institutions; Ripple/XRP is much newer but more nimble, able to move fast in certain corridors.
▪️ Settlement vs messaging: SWIFT historically handles messaging / instruction; Ripple handles actual value settlement using XRP. SWIFT’s blockchain effort appears to be about modernizing messaging plus adding settlement-adjacent capabilities, but Ripple directly handles liquidity and settlement.
▪️ Regulatory clarity & adoption: XRP’s usage depends heavily on regulation (e.g., classification of XRP, stablecoin rules, AML/KYC compliance). SWIFT is embedded in legacy systems and regulatory structures, giving it institutional trust; but it risks lagging in innovation if not careful.

Implications for Global Financial Restructuring

Redefinition of Cross-Border Money Flows: As SWIFT upgrades and blockchain/crypto rails (Ripple/XRP, stablecoins, etc.) improve, money transfer becomes faster, cheaper, and more transparent. This reduces reliance on costly legacy banking intermediaries.
Shifting Power over Financial Infrastructure: Who controls payment rails and messaging systems gains geopolitical leverage. Countries or institutions that adopt XRPL or SWIFT-blockchain systems may control more of the financial flow, clearing, and settlement power.
Currency Sovereignty & De-Dollarization Pressures: As stablecoins and tokenized assets gain traction, less value might flow through USD-centric channels. Ripple’s blockchain model, combined with SWIFT’s recognizing of stablecoins and tokenization, opens up paths for non-USD payment settlements.
Financial Access and Inclusion: Lower fees, faster settlement may make cross-border trade, remittances, and financial services more accessible to smaller countries, SMEs, and unbanked populations. That changes who participates in global finance.

Key Points

SWIFT is shifting from a purely messaging network to a blockchain-based prototype that includes tokenization and smart contracts.
Ripple/XRP already offers settlement finality and liquidity in seconds, which SWIFT’s current model doesn’t yet match in most use cases.
The move by SWIFT suggests incumbents are adapting—not being disrupted entirely but trying to incorporate the innovation around them.

Why This Matters Now
This is about more than tech. It’s about who writes the rules of cross-border value transfer. As SWIFT modernizes, blockchain networks like XRP are testing new possibilities. The intersection of regulation, infrastructure, currency choice, and technology is forming a new financial architecture.

This is not just politics — it’s global finance restructuring before our eyes.

@ Newshounds News™ Exclusive

Sources: