G7 plans to send tough warning to Chinese banks over Russian aid

G7 to threaten Chinese banks with consequences for cooperation with Russia (photo: Getty Images)

The Group of Seven (G7) countries are planning to send a “tough warning” to Chinese banks about the consequences of helping Russia circumvent sanctions for its aggression against Ukraine, reports Reuters.

According to Reuters, the G7 leaders at the June 13-15 summit in Italy are expected to focus on the threat that growing Sino-Russian trade poses to the war in Ukraine and what to do about it during their private meetings.

According to an unnamed U.S. official involved in planning the summit, as well as another Reuters source, these conversations will likely result in public statements regarding small Chinese banks.

However, according to Reuters, the G7 countries will not take any immediate punitive measures (e.g., blocking access to SWIFT) against any Chinese banks at the summit. In addition, the G7 leaders will focus on small financial institutions rather than on China's largest banks.

Currently, negotiations on the exact format and content of the warning are still ongoing, unnamed sources tell Reuters. The plans of the G7 leaders to discuss this topic at the summit in Italy have not been publicly reported before.

Cooperation between China and Russia

Officially, China does not take sides in Russia's war against Ukraine, but it continues to cooperate with Russia after the full-scale invasion. Moreover, trade between China and Russia has only increased during the war. In 2023, it reached a record $240 billion. This is more than double the figure for 2020.

Last December, the US President issued a decree to tighten sanctions against foreign banks that help Russia. This affected the cooperation of Chinese banks with Russia.

According to Bloomberg, Russian companies are using cryptocurrencies and barter to do business with China.