Bloomberg: Banks wary of China's military operation in Taiwan

Bloomberg: Banks wary of China's military operation in Taiwan


Global financial companies consider doing business in China extremely risky due to the aggravated situation around Taiwan and the growing tension in China-US relations. Bloomberg.

In recent months, the agency writes, many banks have assessed the possible losses in the event of an escalation of the conflict and a new wave of sanctions confrontation between the United States and China.

Meanwhile, according to Willis Towers Watson, insurance companies have already increased the cost of insurance for financial institutions operating in China and Taiwan by an average of 67%.

As the agency notes, despite the growing tension in the region, the heads of financial companies consider it unlikely the outbreak of a military conflict in Taiwan. At the same time, they believe that mutual sanctions between the US and China, which will undermine financial and trade flows between the two countries, are an increasingly likely scenario.

In addition, bankers fear a repeat of history with the events in Ukraine, when Western companies had to hastily leave the Russian market, losing billions of dollars. When asked about their readiness to leave China, the heads of American banks are still nodding towards the Joe Biden administration: “This is a hypothetical question, but it is very likely that our presence in the country will be significantly reduced, if any,” the CEO said last week. Citigroup Jane Frazier, noting that the bank will await guidance from the US government.

US banks such as Goldman Sachs and Morgan Stanley have been building up their presence in China in recent years. The total assets of the largest US banks in China were estimated at $57 billion at the end of 2021. If they have to leave the Chinese market under pressure from the authorities, their losses will be very significant, Bloomberg notes.

Kirill Sarkhanyants



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