China will not join sanctions on Russia, banking regulator says

China will not join in sanctions on Russia that have been led by the West, the country's banking regulator said on Wednesday, adding that he believed the impact of the measures on China would be limited.

China, which has refused to condemn Russia's invasion of Ukraine, has repeatedly criticised what it calls illegal and unilateral sanctions.

"As far as financial sanctions are concerned, we do not approve of these, especially the unilaterally launched sanctions because they do not work well and have no legal grounds," Guo Shuqing, chairperson of the China Banking and Insurance Regulatory Commission, told a news conference."We will not participate in such sanctions. We will continue to maintain normal economic and trade exchanges with relevant parties," he said.

China and Russia have grown increasingly close in recent years, including as trading partners. Total trade between the two jumped 35.9 per cent last year to a record $146.9 billion, according to Chinese customs data, with Russia serving as a major source of oil, gas, coal and agriculture commodities, running a trade surplus with China.

"The impact from the sanctions on China's economy and financial sector is so far not too significant," Guo added.

"Overall they will not have much impact [on China] even in the future," Guo said, citing the resilience of China's economy and financial sector.

China on Wednesday accused the United States of “raising tensions” and “creating panic” over the Ukraine crisis, shortly after Washington announced sanctions against Moscow and said it would continue to supply weapons to Ukraine against a Russian invasion.

Beijing has trod a cautious line on Ukraine as Moscow has massed thousands of troops on the borders, and criticised the West for new sanctions after Russia ordered troops into two breakaway Ukrainian regions it now recognises as independent.

US President Joe Biden earlier stressed that the penalties were only a “first tranche”, adding that more sanctions would come if Russian President Vladimir Putin extended his country's military grip beyond the two territories in the eastern Donbas region.

China lashed out at Washington over the sanctions on Wednesday and said it was raising tensions by sending weapons to Ukraine.The US actions were “raising tensions, creating panic, and even playing up the schedule of war”, foreign ministry spokeswoman Hua Chunying told reporters.

“If someone is adding fuel to the fire while blaming others ... then that behaviour is irresponsible and immoral,” she added, turning the spotlight on the United States in response to a question on China's role in resolving the situation.

She said China had “called on all parties to respect and attach importance to each other's legitimate security concerns, strive to resolve issues through negotiation and consultation, and jointly maintain regional peace and stability.”

Asked if China would impose sanctions on Russia, Hua added that Beijing believes “sanctions have never been a fundamental and effective way to solve problems”.

Apart from the United States, Britain, the European Union, Japan and Australia also announced penalties following Putin's decision to send soldiers into Donetsk and Lugansk.

On Tuesday, Biden said Washington would continue to supply “defensive” weapons to Ukraine against a Russian invasion, and deploy US troops to reinforce Nato allies in Eastern Europe.

“Let me be clear, these are totally defensive moves on our part,” Biden said in a televised speech at the White House.