A media report revealed that Chinese regulators and lawmakers held emergency meetings with Chinese and foreign banks to discuss ways to protect the country’s foreign assets from US sanctions similar to those imposed on Russia.
Western countries imposed severe sanctions on the Russian Federation due to a special operation to disarm Ukraine. In early March, the European Union decided to separate seven Russian banks from the SWIFT system: VTB, Rossiya, Otkritie, Novikombank, Promsvyazbank, Sovcombank and the state institution VEB.RF. Finance Minister Anton Siluanov has estimated that Western countries, as part of the sanctions imposed on Ukraine, have frozen about half, or about $300 billion, of Russia’s gold and foreign exchange reserves.
According to the report, Chinese officials fear imposing such measures against Beijing “in the event of a regional military conflict or other crisis.” According to the newspaper’s sources, the meeting, which was held on April 22, was attended by representatives of the Central Bank and the Ministry of Finance of China. At the meeting, the country’s Ministry of Finance noted that all major foreign and Chinese banks operating in China are participating.
It is also noteworthy that the meeting began with the words of a senior official in the Ministry of Finance, that Beijing is concerned about the ability of the United States and its allies to freeze the dollar assets of the Bank of Russia.
According to the publication, the meeting did not mention specific scenarios in which China could face sanctions, but the “Chinese invasion of Taiwan” is considered a possible cause. “If China attacks Taiwan, the separation of the Chinese and Western economies will be much more dangerous than (separation) from Russia, because China’s economic influence affects all parts of the world,” one of the newspaper’s sources said. Another spokesperson noted in the post that “the Chinese banking system is not ready” to freeze its dollar assets or be excluded from the SWIFT system.
Formal relations between the central government of the People’s Republic of China and its island province were severed in 1949, after the Kuomintang forces led by Chiang Kai-shek were defeated in a civil war with the Chinese Communist Party, and moved to Taiwan. Commercial and informal contacts between the island and mainland China resumed in the late 1980s. Since the early 1990s, the parties have started to communicate through NGOs.