China has escalated its response to European Union sanctions by restricting transactions with two EU-based financial institutions, UAB Urbo Bankas and AB Mano Bankas, effective immediately. The Ministry of Commerce announced the move on Wednesday, barring organizations and individuals within the Chinese mainland from conducting business with the banks.
The decision follows the EU's July sanctions against two Chinese financial institutions as part of broader measures targeting Russia. Beijing condemned the EU's actions as a 'severe violation of international law' that undermines Chinese companies' rights. Analysts view this as a strategic response to protect national economic interests while signaling resolve in cross-continental trade disputes.
Financial experts suggest the measures could ripple through European investment channels in Asia, particularly affecting cross-border fintech collaborations. The development comes as China and the EU navigate delicate negotiations over electric vehicle tariffs and technology transfers.
While the immediate impact appears limited to the named institutions, business leaders warn of potential chilling effects on China-EU financial cooperation. The Ministry reiterated its commitment to 'necessary measures safeguarding Chinese enterprises' rights' while leaving room for diplomatic resolution.
