China believes there will come a time when the US may impose on it the kind of sanctions it has subjected Russia to for attacking Ukraine. Does this mean it is contemplating an invasion of Taiwan? Well, contemplating such an eventuality, the government of China has ordered a comprehensive “stress test” to find out how the country would handle sanctions like the ones imposed by the US-led Nato nations and the European Union on Russia. An unnamed source told The Guardian that an extensive exercise had been initiated in late February and early March when Western allies imposed sweeping sanctions against Moscow.
The source said that several key Chinese government agencies had been asked to come up with responses if the West imposed similar embargoes on China.
“Those involved in this exercise use how Russia was treated as a baseline for China’s own policy response should it be treated in the same fashion by the West,” the source explained, adding: “This stress test involves a range of methodology, including modelling.”
Tong Zhao, a senior fellow at the Carnegie Endowment for International Peace based in Beijing, said that from Beijing’s perspective, “if the US-led Western allies could take such measures against Moscow, they could also do the same to China. Therefore, it needs to know how resilient the country really is”.
Zhao said, “For the past few years, there’s been a growing concern among Beijing’s leadership that a strategic conflict between China and the West may not be a question of whether it’d happen, but when it will happen, in particular over the issue of Taiwan.”
Edward Fishman, a former adviser to John Kerry on economic sanctions at the US state department, said that no economy, not even China, was immune to the types of financial sanctions that the West has wielded against Russia. “There is no good alternative to the western financial system, and that’s likely to remain the case for a long time,” he told The Guardian.
“The future of economic conflict between the West and China, therefore, will likely be narrower in scope than what we’ve seen from the west in recent months against Russia. It will centre on jockeying for leverage in strategic areas – such as frontier technologies and next-generation infrastructure — not on trying to produce broad-based economic disruption,” Fishman said.
The Financial Times reported earlier that the Chinese finance ministry and the central bank held a meeting last month with domestic and foreign banks, including HSBC, to discuss how they could protect China’s overseas assets should Russia-style sanctions led by the US and its Western allies also be imposed.