Chinese regulators recently met with a dozen representatives of national and international banks to find solutions to counter possible American sanctions, similar to those imposed on Russia, particularly in the event of a conflict with Taiwan. The aim: to avoid a freeze on the country's assets abroad.
Emergency meeting with bank representatives
The Chinese administration preferred to take the lead, organizing a meeting with officials from the People's Bank of China and the Ministry of Finance to study how they could protect the country's assets. In particular, Beijing fears the same measures will be taken against Russia following its invasion of Ukraine.
Keeping an eye on Taiwan
Beijing is also keeping a close eye on Taiwan, whose territory it has claimed for decades. Since the start of the war in Ukraine, the threat has become much more concrete, with Chinese President Xi Jinping putting forward arguments relatively similar to those used by Vladimir Putin to invade Ukraine. A few weeks ago, the Taiwanese army published a wartime survival manual in response to public concerns.
If the Taiwanese are worried about their survival, China fears for the fate of its overseas assets in the event of an invasion of the archipelago. In particular, the country holds $1,000 million in US Treasury bonds.
" If China attacks Taiwan, the decoupling of the Chinese and Western economies will be far more serious than [that with] Russia, because China's economic footprint touches every part of the world ," says one of the " Financial Times" sources.
According to General Kenneth Wilsbach, Commander of U.S. Air Forces in the Pacific, who points out that Beijing has never given up on reclaiming Taiwan, if necessary by force, China could take advantage of the Ukrainian crisis to attempt a " provocative " gesture in Asia.
Solutions similar to those found in Russia
To avoid a freeze on its foreign assets, China is already looking to the banks for solutions. Their representatives have suggested taking a leaf out of Russia's book. These includerequiring exporters to exchange their foreign currency earnings into renminbi, which would enable Beijing to increase its local dollar reserves.
At the meeting, however, several bankers expressed reservations about the USA severing economic ties with China. While China has no desire to be drawn into a conflict that could further damage its relations with Europe and the United States, in recent weeks it has supported Russia's demands. So, whatever its position, Beijing won't be able to play the balancing act forever, and will have to make a choice: adhere to Western sanctions or help Russia avoid them.