The sanctions imposed on Russia by the West to punish it for its military action in Ukraine have caused Beijing to conduct massive stress tests modeling the impact of Russia-style sanctions on China.
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According to The Guardian, which cited a source familiar with the exercise, the Chinese government conducted a comprehensive “stress test” scenario in late February and early March to mimic the impact of Western sanctions similar to those imposed on Russia on the Chinese economy.
The test reportedly comprised important government institutions, including bank regulators and international trade authorities, with officials tasked with drafting emergency steps to be taken if restrictions were imposed.
“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. This stress test involves a range of methodology, including modelling,” the source indicated.
According to the source, the stress test was Beijing’s “natural reaction” to the Russian-Western crisis.
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The test, according to Tong Zhao, a senior scholar at the Carnegie Endowment for International Peace in Beijing, was a reasonable measure because what the US and its allies did to Russia could be done to China as well. According to the researcher, the stress test was conducted in part in response to US threats to sanction China if it gave military, economic, or military help to Russia. Washington stated this week that it has seen no evidence of such assistance being supplied.
The ‘stress test’ comes after the Financial Times reported last week that China’s central bank and finance ministry met with representatives of major national lenders and foreign banks operating in the country to discuss how Beijing can protect its assets after the US and its allies seized nearly half of Russia’s foreign reserves in late February.
Russian Foreign Minister Sergei Lavrov stated on Sunday that over $300 billion in Russian reserve assets saved through oil and gas exports to the West had been “stolen” to “punish” Russia for its military action in Ukraine.
“Now we are offered to continue trading as before, and the money will remain with them. When they want, they will pocket [the money] again,” Lavrov remarked, referring to European countries’ opposition to paying for Russian natural gas in rubles through Gazprombank.