Chinese regulators held an emergency meeting with domestic and foreign banks to discuss how they could protect the country’s assets overseas from US sanctions similar to those imposed on Russia for its invasion of the Ukraine, according to people familiar with the discussion.

Officials fear the same action could be taken against Beijing in the event of a regional military conflict or other crisis. President Xi Jinping’s administration has maintained staunch support for Vladimir Putin throughout the crisis, but Chinese banks and companies remain cautious about dealings with Russian entities that could trigger US sanctions.

The internal conference, held on April 22, included officials from China’s central bank and finance ministry, as well as executives from dozens of local and international lenders such as HSBC, the sources said. The Ministry of Finance said at the meeting that all major foreign and domestic banks operating in China were represented.

They added that the meeting began with remarks from a senior finance ministry official who said Xi’s administration had been put on alert by the ability of the United States and its allies to freeze assets in dollars from the Russian central bank.

Officials and attendees did not mention specific scenarios, but one possible trigger for these sanctions would be a Chinese invasion of Taiwan, which China claims as its territory and has threatened to invade if Taipei refuses to stand down. submit to his control indefinitely.

“If China attacks Taiwan, the decoupling of the Chinese and Western economies will be much more severe than [decoupling with] Russia because China’s economic footprint touches every region of the world,” said one of the people briefed on the meeting.

Andrew Collier, managing director of Orient Capital Research in Hong Kong, said the Chinese government was right to be concerned “because it has very few alternatives and the consequences [of US financial sanctions] are disastrous”.

High-level regulators, including Yi Huiman, chairman of the China Securities Regulatory Commission, and Xiao Gang, who headed the CSRC from 2013 to 2016, asked the bankers present what could be done to protect the country’s foreign assets, in particular its $3.2 billion in foreign exchange reserves.

China’s vast dollar-denominated holdings range from more than $1 billion in US Treasuries to office buildings in New York. The state-owned Dajia Insurance Group, for example, owns the Waldorf Astoria New York.

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“No one there could think of a good solution to the problem,” said another person briefed on the meeting, “China’s banking system is not prepared for a freeze on its dollar assets or exclusion from the system. Swift courier like the U.S. did to Russia.

HSBC did not respond to a request for comment.

Some bankers have suggested that the central bank could require exporters to exchange all their foreign currency earnings for renminbi in order to increase its onshore dollar holdings. Exporters are currently allowed to retain part of their foreign exchange earnings for future use.

Others have suggested a “significant” reduction in the $50,000 quota that Chinese nationals are allowed to buy each year for overseas travel, education and other overseas purchases.

When an official asked Chinese bankers if they could diversify into more yen- or euro-backed assets, they said the idea was impractical.

Some bankers present, however, doubted Washington could ever afford to sever economic ties with China given its status as the world’s second-largest economy, huge dollar holdings and close trade relationship with the United States.

“It is difficult for the United States to impose massive sanctions against China,” Collier acknowledged. “It’s like mutually assured destruction in a nuclear war.”

Additional reporting by Tabby Kinder in Hong Kong