US sanctions threat if China aids Russia stirs fear in Beijing about forex assets

US sanctions threat if China aids Russia stirs fear in Beijing about forex assets

Washington's financial sanctions on Russia for invading Ukraine have raised concern in China over its large exposure to US government bonds, although experts say there is no real alternative for the country to invest its foreign exchange reserves.

In recent weeks, former central bank adviser Yu Yongding and former vice-chairman of the Bank of China, Wang Yongli, have issued warnings about the effect that Western sanctions could have on China's investment in foreign securities, amid US threats of "consequences" if Beijing helps Russia evade sanctions.

"If China also encounters similar sanctions against Russia, its overseas assets may even face the danger of turning to zero," said Yu, a prominent Chinese economist, in a blog post last week.