The Chinese government ran a comprehensive “stress test” drill in late February and early March to model what impact Western sanctions similar to those imposed against Russia would have on its economy, The Guardian has reported, citing a source with knowledge of the exercise.
The test reportedly involved key government agencies, including bank regulators and international trade bodies, with officials tasked with formulating emergency measures 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.
The source suggested that the stress test was Beijing’s “natural reaction” to the crisis between Russia and the West.
Tong Zhao, a senior fellow at the Beijing-based Carnegie Endowment for International Peace, said the test was a logical measure, given that what the US and its allies did to Russia could be done to China as well. The researcher said the stress test may have been undertaken in part amid US threats to sanction China if it provided military or economic or military assistance to its Russian partner. This week, Washington admitted that it has not seen any evidence of such support being provided.
The ‘stress test’ comes on the heels of a report by the Financial Times last week that regulators from China’s central bank and the finance ministry met with representatives of major national lenders and foreign banks operating in the PRC to discuss how Beijing can protect its assets after Russia lost nearly half of its foreign reserves following their seizure by the US and its allies in late February.
Commenting on the asset seizure on Sunday, Russian Foreign Minister Sergei Lavrov said that over $300 billion in Russian reserve assets saved through exports of oil and gas to the West were “stolen” to “punish” Russia for its military operation 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 added, referring to European countries’ resistance to paying for Russian natural gas in rubles through Gazprombank.