- Chinese officials are meeting with banks to find ways to protect assets abroad.
- The country is said to be concerned that the United States may impose sanctions similar to those against Russia.
- China is said to hold about $ 3.2 trillion in foreign reserves.
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China is reportedly taking steps to protect its overseas assets amid fears that the country could one day face sanctions similar to those imposed on Russia.
Russia’s invasion of Ukraine has taught difficult lessons for China, which has been embroiled in a long-running dispute with Taiwan. China has long rejected its neighbor’s claims to sovereignty, fueling speculation that it will one day invade and fully annex Taiwan.
The United States and other Western nations have imposed sanctions on Russia in an attempt to end Putin’s war in Ukraine. Sanctions include a ban on SWIFT, a complete blockade of major Russian financial institutions, measures aimed at Russia’s public debt and even sanctions against oligarchs and their families.
According to the Financial Times, Chinese officials recently held an emergency meeting with local and foreign banks to discuss how the state can protect its assets if it ever faces such penalties.
People familiar with the conference, which took place on April 22, told the FT that the meeting was composed of officials from the Central Bank and the Ministry of Finance of China, heads of dozens of local and international creditors such as HSBC and representatives of other local banks. working in China.
A source told the newspaper: “If China attacks Taiwan, the separation of the Chinese and Western economies will be much harder than [decoupling with] Russia, because China’s economic footprint affects every part of the world. ”
China and Russia are working on a domestic alternative to the SWIFT payment system, Russia’s financial messaging system and China’s cross-border interbank payment system.
According to the South China Morning Post, China has $ 3.2 trillion in foreign reserves. The FT reported that senior regulators, including Yi Huiman, chairman of China’s Securities Regulatory Commission, and Xiao Gang, who headed the CSRC from 2013 to 2016, asked bankers how they could protect their overseas assets.
“They are watching with great interest to see how effective sanctions imposed on Russia can be effectively applied to China,” Douglas H. Paal, a non-resident scientist with the Carnegie Endowment for International Peace, told Insider in March.
“If there is an invasion of Taiwan, China would expect the United States to call for the widest possible set of sanctions.
Andrew Collier, managing director of Orient Capital Research in Hong Kong, told the newspaper that the Chinese government was right to worry, “because there are very few alternatives and the consequences [of US financial sanctions] are catastrophic. “
Insider asked the Chinese Foreign Ministry for comment.
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