I don’t expect that China would burn trade deals with countries unless they have to either. However, I do think it’s realistic for China to say that they wish further payments to happen in yuan the way Russia did with roubles after being frozen out of SWIFT. Europeans might grumble a bit about it, but when push comes to shove they have no choice but to go along with that.

The main problem for China is that if it continues to be reliant on SWIFT then it’s exposed to financial warfare by the west. Hence, why I think China will want to avoid doing trade using western financial system as much as possible going forward.

So, I agree with you that China will likely be very surgical regarding what trade it cuts with the west entirely, I do expect it to nudge the countries it trades with to start increasing trading outside the dollar going forward.