China’s major banks are still trying to respond or circumvent the sanctions. (Image source: Adobe stock)
[See China March 5, 2022 News](See a comprehensive report by Chinese reporter Wen Long) SinceRussiaattackUkraineSince then, European and American countries have taken turns offeringsanctionmeasures, including sanctions on the Central Bank of Russia and the removal of seven banks fromSWIFTSystem delisting, etc.althoughChinaChina Banking and Insurance Regulatory Commission said it would not participatefinanceSanctions against Russia, but majorBankStill thinking of responding or circumventing sanctions.
Guo Shuqing, chairman of the China Banking and Insurance Regulatory Commission, said at a press conference on March 2 that the foreign ministry had fully elaborated on Beijing’s position on the Russian-Ukrainian conflict. In terms of financial sanctions, Guo Shuqing said that he does not agree, because it does not work well and has no legal basis, so he will not participate in the sanctions.
Guo Shuqing also said that the impact of financial sanctions on China’s economy and finance is not too obvious now and needs to be observed.
After Russian President Vladimir Putin ordered an attack on Ukraine, the international community cut off Russia’s many ties with the outside world. The U.S. and its allies took action against the Russian central bank, preventing it from using $630 billion in international reserves and announcing the delisting of seven Russian banks from the Society for Worldwide Interbank Financial Telecommunication (SWIFT) payment system, significantly limiting Russia’s ability to engage in international banking. ability.
Although the China Banking and Insurance Regulatory Commission has stated that it will not join the sanctions imposed by European and American countries on Russia, some Chinese banks have actively taken measures to respond to or evade sanctions.
According to “Reuters” reported on March 4, people familiar with the matter said that China’s big banks are busy on the one hand to ensure that they maintain business ties with Russian customers, on the other hand, to avoid conflicts with a series of sanctions from European and American countries.
Executives at some of the major Chinese banks are now exploring alternative payment systems, while considering whether to shift some of their business to smaller domestic-focused lenders to avoid secondary sanctions, two of the bankers said.
Secondary sanctions are restrictions that apply to entities that do business with sanctioned entities, and entities that violate such sanctions will also be sanctioned, for example, at risk of being cut off from sources of U.S. dollar liquidity.
“Sanctions don’t directly apply to us, we can lend to Russian entities, but is it wise? It’s not the best thing to do right now,” said a Chinese bank executive.
Wang Yongli, a former board member of SWIFT, believes that large Chinese banks with overseas operations and branches may become very cautious because the US and its allies can sanction their business in international markets if they violate the rules.
At least two of China’s largest state-owned banks, Bank of China and Industrial and Commercial Bank of China, are restricting financing for purchases of Russian goods, Bloomberg reported on February 26.
Authorities at the Industrial and Commercial Bank of China have stopped issuing dollar-denominated letters of credit for Russian goods to be exported, two people familiar with the matter said. Some clients can still use yuan-denominated letters of credit, but they need approval from executives, the people said.
The moves underscore the difficult choices facing China’s largest financial institution and President Xi Jinping. Although Russia is China’s main energy supplier, and China and Russia are often allied in geopolitical disputes with the United States. But Russia’s economic clout pales in comparison to the European and American countries that buy many of China’s exports and control their access to the dollar-dominated international financial system.
China’s big four state-owned banks have previously complied with U.S. sanctions on Iran and North Korea because they need to use a U.S. dollar clearing system.
Responsible editor: Xin He Source: look at China
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