Officials worry that the same measures could be taken against Beijing in the event of a regional military conflict or other crisis. The administration of President Xi Jinping has maintained that Strong support for Vladimir Putin Throughout the crisis, however, Chinese banks and companies have remained wary of doing business with Russian entities that could lead to US sanctions.

The internal conference, held on April 22, brought together officials from China central bank The Ministry of Finance, as well as executives from dozens of domestic and international lenders such as HSBC, told People. The Ministry of Finance said at the meeting that all large foreign and domestic banks operating in China were represented.

They added that the meeting began with statements from a senior official at the Ministry of Finance, who said that the Chinese president’s administration was put on alert due to the ability of the United States and its allies to freeze dollar assets of the Russian Central Bank.

Officials and attendees did not mention specific scenarios, but one possible reason for such sanctions is believed to be the Chinese invasion of Taiwan, which China claims as its territory and has threatened to invade if Taipei refuses to come under its control indefinitely.

“if China attacks Taiwanthe separation of the Chinese and Western economies will be much more severe than [decoupling with] “Russia is because China’s economic footprint touches every part of the world,” said one of the people briefed on the meeting.

Andrew Collier, managing director of Orient Capital Research in Hong Kong, said the Chinese government was right to worry “because it has very few alternatives and consequences.” [of US financial sanctions] disastrous.”

Top regulators, including Yi Huiman, chairman of the China Securities Regulatory Commission, and Xiao Gang, who chaired the CSRC from 2013 to 2016, asked bankers in attendance what they could do to protect the country’s external assets, especially its $3.2 trillion foreign reserves.

China’s massive dollar holdings range from more than a trillion dollars in US Treasuries to New York office buildings. The state-owned Dagia Insurance Group, for example, owns the Waldorf Astoria New York.

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“No one on the scene can think of a good solution to the problem,” said another person familiar with the meeting, “The Chinese banking system is not ready to freeze its dollar assets or exclude them from the Swift messaging system as the United States did to Russia.”

HSBC did not respond to a request for comment.

Some bankers have suggested that the central bank might require exporters to exchange all their foreign exchange earnings for renminbi to increase their domestic dollar holdings. Exporters are currently allowed to keep a portion of their foreign exchange earnings for future use.

Others have proposed a “significant” cut in the $50,000 quota that Chinese citizens are allowed to buy each year for overseas travel, education and other overseas purchases.

When a Chinese banker asked if they could diversify into more yen or euro-backed assets, they replied that the idea was impractical.

However, some bankers present questioned whether Washington could afford to sever economic ties with China given its status as the world’s second largest economy, its vast holdings of dollar assets and its close trading relationship with the United States.

“It is difficult for the United States to impose severe sanctions on China,” Collier agreed. “It’s like mutual assured destruction in a nuclear war.”