According to the Financial Times, Chinese regulators and major banks are determined to protect their overseas assets from the negative effect of US sanctions.
In late April, China's regulators held an emergency meeting with the heads of domestic and foreign banks. The main topic of discussion was the need to find a way to protect the country's overseas assets from US-led sanctions, the Financial Times reported. Notably, tough sanctions introduced against Russia froze half of the country's gold and foreign exchange reserves (about $300 billion).
The leading news organization notes that Chinese officials are worried that the same measures could be taken against Beijing. This issue became a key one at the conference held on April 22, which included officials from China’s central bank and finance ministry, as well as executives at all major foreign banks operating in the country.
Experts admit that the so-called "Chinese invasion of Taiwan" may become a trigger for imposing such sanctions on the world's second-largest economy. In case China attacks Taiwan, "decoupling of the Chinese and western economies will be far more severe than [decoupling with] Russia because China’s economic footprint touches every part of the world," a well-informed source told the Financial Times.
Interestingly, Chinese authorities halted official diplomatic ties with the government of Taiwan in 1949. The relations were renewed in the late 1980s. Since the 1990s, business contacts between Taiwan and mainland China have been carried out through such non-governmental organizations as Beijing’s Relations Development Association and the Taipei Exchange Fund.
Some economists are confident that China's banking system will not be able to handle a freeze of its foreign assets or exclusion from the SWIFT international payments network.
