China is opposed to unilateral financial sanctions against Russia and will not join Western countries in imposing them, the head of the country’s banking and insurance regulator says.
As The Wall Street Journal reported Wednesday (March 2), Guo Shuqing says China will “not participate in such sanctions, and we will continue to maintain normal economic, trade and financial exchanges with relevant parties.”
The latest sanctions saw Western allied nations cut off Russia from the SWIFT global financial messaging system.
Guo said in a briefing that unilateral financial sanctions typically don’t produce a good effect and lack a legal basis.
The sanctions levied by the U.S and other nations have had a major impact in Russia, leading the ruble to crash to the point where, as of Wednesday morning (March 2) it was worth 0.0091 dollars.
Read more: Economic Warfare vs. Russia Proves Effective
A large percentage of Russia’s foreign exchange and trade is denominated in dollars, which means the country cannot access the dollars it has traditionally kept in reserve — and, by extension, dollars cannot be used to ease the impact of sanctions or help prop up the ruble.
The EU has barred a number of Russian banks from SWIFT, which is crucial for cross-border payments. By keeping Russian banks off the system, the sanctions prevent the banks from working with other banks to carry out transactions, which in turn makes everyday commercial commerce cost prohibitive.
The Journal report notes that — given China and Russia’s close ties — analysts believe China could offer an alterative through its own version of SWIFT, the Cross-Border Interbank Payment System, which has a limited reach.
As for the impact of sanctions on China’s financial system and economy, Guo said “it is not too obvious now and needs to be observed,” but added the impact should be limited due to the resilience of his country’s economy.
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