China buckles under pressure? Financial regulator asks banks to temporarily suspend new loans to US sanctioned refineries: Report
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The NFRA instruction to not sanction new loans to the us sanctioned refineries is in contrast with what China’s Ministry of Commerce had said earlier this week.
A few days after United States sanctioned five Chinese refineries, over their ties to Iranian oil, China’s financial regulator has advised the country’s largest banks to temporarily suspend new loans to these companies.
According to Bloomberg, the National Financial Regulatory Administration (NFRA) asked banks to review their business dealings with Shandong Jincheng Petrochemical Group, Shandong Shouguang Luqing Petrochemical and Shandong Shengxing Chemical. It also applies to two other companies based elsewhere in China: Hengli Petrochemical (Dalian) Refinery,one of China’s largest private refiners, and Hebei Xinhai Chemical Group. NFRA has also asked the banks to wait for further orders in this regard.
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China, a key customer of Iranian oil, relies on discounted crude from Iran mainly through independent “teapot” refineries. Amid tensions in West Asia, the US had ramped up its economic pressure on Tehran, imposing sanctions on such refineries.
China had earlier rejected US sanctions?
The NFRA instruction is in contrast with what China’s Ministry of Commerce had said earlier this week. On May 2 it had asked these oil companies to disregard the sanctions by saying that the US measures “shall not be recognised, implemented, or complied with.”
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In a statement, the ministry added that the sanctions “improperly prohibit or restrict Chinese enterprises from conducting normal economic, trade and related activities with third countries... and violate international law and the basic norms governing international relations.”
“The Chinese government has consistently opposed unilateral sanctions lacking UN authorisation and a basis in international law,” it added.
The NFRA, which regulates banks and insurers, have yet to respond to the report said Bloomberg.
This instruction by NFRA comes just days ahead of US President Donald Trump and his counterpart Xi Jinping's meeting in Beijing on May 14–15.
