US drafting sanctions threaten to cut some Chinese banks off from global financial system

Wall Street Journal with the report (gated):

• The U.S. is drafting sanctions that threaten to cut some Chinese banks off from the global financial system, arming Washington’s top envoy with diplomatic leverage that officials hope will stop Beijing’s commercial support of Russia’s military production, according to people familiar with the matter.
• China has heeded Western warnings not to send arms to Russia since the beginning of the war, but since Blinken’s trip to Beijing last year, China’s exports of commercial goods that also have military uses have surged. With China now the primary supplier of circuitry, aircraft parts, machines and machine tools, U.S. officials say Beijing’s aid has allowed Moscow to rebuild its military industrial capacity.

Sanctions that impact Chinese banks will also threaten the ‘China proxy’ trade such as AUD.

This article was written by Eamonn Sheridan at www.forexlive.com.