China is reportedly taking steps to protect its assets abroad amid fears that the country could one day face sanctions similar to those imposed on Russia. The Russian invasion of Ukraine has taught hard lessons to China, which is itself embroiled in a long-running dispute with Taiwan. China has long dismissed its neighbor’s claims of sovereignty, fueling speculation that it will one day invade and annex Taiwan altogether. The United States and other Western powers have imposed sanctions on Russia in a bid to end Putin’s war in Ukraine. Sanctions include a ban on SWIFT, a complete shutdown of major Russian financial institutions, measures targeting 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 domestic and foreign banks to discuss how the state could protect its assets in the event of similar sanctions. People familiar with the conference, which took place on April 22, told FT that the meeting consisted of central bank and Chinese finance ministry officials, executives from dozens of local and international lenders such as HSBC, and representatives of other domestic banks operating in China. A source told the newspaper: “If China attacks Taiwan, the disconnection of the Chinese and Western economies will be much more serious than [decoupling with] “Russia because China’s economic footprint touches 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 exchange reserves. The FT said senior regulators, including Yi Huiman, chairman of the Securities Regulatory Commission, and Xiao Gang, head of the CSRC from 2013 to 2016, asked bankers how they could protect their assets abroad. “They are watching with great interest to see how effective sanctions against Russia could be effectively enforced in China,” Douglas H. Paal, a researcher at the Carnegie Endowment for International Peace, told Insider in March. “If there is an invasion of Taiwan, China would expect the United States to impose the widest possible range of sanctions.” Andrew Collier, chief executive of Orient Capital Research in Hong Kong, told the newspaper that the Chinese government was right to be concerned “because there are so few alternatives and consequences.” [of US financial sanctions] they are catastrophic. “ Insider approached China’s Ministry of Foreign Affairs for comment.