The Trump administration shied away from blacklisting two of China’s big four state-owned banks over their North Korean ties due to concerns about the potential impacts on the international financial system as well as Sino-US relations, according to sources speaking to Bloomberg.
The sources said that the US Treasury officials considered banning Agricultural Bank of China and China Construction Bank from participating in the US financial system due to their business transactions with North Korea, after Pyongyang made provocative shows of its nuclear technology last summer.
A 2016 US asset-seizure case said that both banks provided accounts to a Chinese trading company that laundered money for North Korean parties.
Plans for a ban were scuppered, however, by fears of how a blacklisting would affect the international financial system, as well as the potential for retaliatory measures from Beijing.
The US Treasury instead opted to blacklist two small lender in China for providing succour to North Korea, as well as a number of trading and shipping companies.
Agricultural Bank of China and China Construction Bank are two of China’s big four state-owned banks, and are both larger than the biggest bank by assets in the US, being JPMorgan Chase & Co.
Observers say that the outcome demonstrates the systemic importance of China’s big four-state owned banks to the global finance, as well as tensions and disagreement within the US Congress about the appropriate means for dealing with a defiant North Korea.