Sanctions imposed on Chinese banks could have ripple effects on the ‘China proxy’ trade, which involves investing in currencies and assets that are expected to benefit from China’s economic growth. One such currency is the Australian dollar (AUD), which has been seen as a proxy for the Chinese yuan. However, if Chinese banks are sanctioned, it could reduce demand for the yuan and, by extension, the AUD.
As sanctions intensify, Russian mining giant Norilsk Nickel has announced plans to move some of its copper smelting operations to China. The company will establish a joint venture to build a new plant in China, which is expected to be operational by mid-2027. The final product will be sold as Chinese, reducing the risk of sanctions and ensuring access to the Chinese market.
