(Reuters) – The United States is drawing up sanctions that threaten to cut off some Chinese banks from the global financial system, which officials hope will halt Beijing’s trade support for Russian military production, the Wall Street Journal reported on Monday, citing people close to the issue. .
As Secretary of State Antony Blinken visits China this week, the question is whether this powerful financial threat could dent China-Russia trade by allowing Moscow to rebuild its military after losses in Ukraine, the report said.
Blinken on Friday criticized China’s support for Russia’s defense industry, saying Beijing was the main contributor to Moscow’s war in Ukraine through the supply of critical weapons components.
In recent weeks, U.S. officials have stepped up pressure on China, warning that Washington is poised to take action against Chinese financial institutions that facilitate trade in goods that have both civilian and military applications.
The People’s Bank of China and the National Financial Regulatory Administration, China’s top banking regulator, did not immediately respond to requests for comment from Reuters.
China and Russia have promoted more trading in yuan rather than dollars following the war in Ukraine, an effort that could protect their economies from a potential increase in U.S. sanctions.