China barred CCP elites from holding overseas assets after the West punished Russia with sanctions.
The Chinese Communist Party (CCP) takes preventive measures to insulate its senior officials from potential sanctions from the U.S. and Europe.
The Wall Street Journal, on May 19, citing sources, revealed that the CCP issued an internal directive in March. The order bans CCP senior officials from directly holding property abroad or stakes in overseas entities.
It would also bar spouses and children of ministerial-level officials from owning, directly or indirectly, any real estate abroad or shares in overseas entities.
The CCP Central Organization Department outlines the internal directive.
It would also prohibit senior officials and their immediate family members from setting up accounts with overseas financial institutions unless they have legitimate reasons such as study or work.
The sources said the CCP also warned that senior officials and their families would lose promotion opportunities if they had significant overseas assets. In addition, CCP officials must sign a guarantee to comply with the new rules.
The directive came as China is learning lessons from the West’s harsh sanctions against Russia following its invasion of Ukraine.
According to the Wall Street Journal, Chinese leader Xi Jinping is reducing geopolitical risks similar to what has happened to Russia.
The measures would prevent senior Chinese officials with overseas financial exposure from becoming victims if the West were to suddenly target the CCP with sanctions.
Following the Russia-Ukraine war, the U.S. has repeatedly warned China not to help Moscow evade international sanctions. In their call in March, U.S. President Joe Biden told Xi Jinping that China could face sanctions if it gave material support to Russia.
Facing those warnings, some Chinese state-owned enterprises seek to withdraw their business from Western countries.
Reuters, citing industry sources on April 13, said that China’s top offshore oil and gas producer, CNOOC, is preparing to exit its operations in Britain, Canada, and the U.S. The energy giant cited concerns that its assets could become subject to Western sanctions.
But the CCP’s internal directive is an upgrade to its precautionary measures to prepare for a potential conflict with the West. China has voiced its intention to invade Taiwan by force.
According to the Wall Street Journal, the directive could also provide Xi Jinping with new leverage to control the CCP elites ahead of the 20th National Congress later this year.