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China is reportedly taking precautions to preserve its offshore assets amid fears that penalties similar to those imposed on Russia could be imposed on the country in the future.
China is involved in a longstanding dispute with Taiwan regarding its independence, prompting expectations that China will attack and take the island altogether one day. If Taiwan is invaded, China expects the US to retaliate with as broad a set of penalties as feasible.
China looks to recent sanctions imposed by the US on Russia in an effort to put an end to Putin's war. The United States and other Western nations have slapped severe sanctions on Russia. A SWIFT embargo, a complete blockade of large Russian financial institutions, measures aimed at Russia's national debt, and even sanctions against oligarchs and their families are among the sanctions.
In preparation for this, Chinese officials recently convened an emergency meeting with local and international banks to explore how the government may safeguard its assets if it ever faces such sanctions.
Individuals attending the meeting include central bank officials and finance ministers of China and representatives from both domestic and international lenders.
China has $3.2 trillion in foreign reserves, according to current estimates, and senior Chinese officials asked bankers how they could preserve their holdings abroad.
In general, China is watching with extreme interest seeking to determine if the sanctions imposed on Russia can be successfully applied to China.
China is right to be concerned, according to experts, because it has few options, and the effects of US financial sanctions are disastrous.
China is also collaborating with Russia on a payment system that would be an alternative to the SWIFT payment system for facilitating international financial transactions, with the goal of integrating Russia's System for Transfer of Financial Messages with China's Cross-Border Interbank Payment System.
