US sanction threats against Chinese banks over Russia trade ties risk ‘gargantuan’ financial instability
- Reports suggest US has ‘preliminarily discussed sanctions on some Chinese banks’ over their trade with Russia
- Analysts say moves to remove China from the Swift interbank financial system could create a ‘huge problem’ for global trade
Washington would create global financial instability, while damaging the United States’ already tenuous ties with Beijing, if it carried out reported threats to sanction Chinese banks over their trade with Russia, and even cut China out of the Swift global interbank system, analysts said on Wednesday.
The Wall Street Journal reported on Monday, without elaboration, that Washington was drafting sanctions to help US Secretary of State Antony Blinken persuade Beijing to stop any commercial support for Russia’s military production.
But any financial sanctions against China as a major trading partner with much of the world would set back transactions in Europe and the US, where merchants conduct brisk business with China, the analysts said.
This could severely impede the interests of American companies and investors in China
“The US would be creating a gargantuan source of financial instability for not only China, but also itself,” said Brian Wong, a fellow at the Centre on Contemporary China and the World at the University of Hong Kong.