Beijing instructs major lenders to suspend new yuan loans to five U.S.-sanctioned refiners, conflicting with its own blocking measures.
China’s financial regulator has directed major banks to suspend new yuan-denominated loans to five Iranian oil refiners recently sanctioned by the U.S. The move targets firms including Hengli Petrochemical, China’s largest private refiner, over allegations of purchasing billions in Iranian crude. Existing credit lines remain unaffected, but the directive contrasts with a May 2 Ministry of Commerce notice urging firms to ignore U.S. sanctions under China’s 2021 blocking measures.
The yuan strengthened to its highest PBOC fixing since March 2023 amid easing Middle East tensions, while Labor Day holiday spending rose 14.3% year-on-year. Economists, however, warned the spending boost may be temporary due to weak labor market conditions and persistent property sector challenges.
The conflicting signals from Beijing highlight its balancing act between compliance pressures and resistance to foreign sanctions, with potential implications for trade flows and financial sector stability.