US has no plans to sanction Chinese banks over Russia

Washington is looking for ways to curb Beijing’s support for Russia. But sanctions against Chinese banks are not in sight.

An official, speaking to Reuters on condition of anonymity, said there were no plans to sanction Chinese banks and that officials hoped diplomacy would prevent the need for such action.

In recent weeks, US officials have stepped up pressure on China, warning that Washington was prepared to take action against Chinese financial institutions that facilitate trade in goods with civilian and military applications. US Secretary of State Anthony Blinken also criticised China’s support for Russia’s defence industry on Friday, saying Beijing was a major contributor to Moscow’s war in Ukraine by providing critical components for weapons.

Cutting off banks’ access to the dollar, which is used in much of global trade, is usually reserved as a last resort, as such sanctions often force banks into bankruptcy.

It would also pose a particular risk to China at a time of slowing economic recovery and rising debt.

In the past, the US has sanctioned smaller Chinese banks, such as Bank of Kunlun, on a variety of issues, including working with Iranian institutions.

China sanctions US companies and executives for Russia and Taiwan