The United States might impose some form of sanctions on biggest Chinese banks as the tensions between North Korea and the United States escalate over North Korea’s test of Hydrogen bomb last Sunday. In August, the United States’ treasury announced sanctions on several Chinese entities after sanctioning China’s Dandong bank in June. Now analysts fear that those sanctions could be extended or limited sanctions could be imposed on much larger Chinese banks that allegedly helped North Korea to access U.S. financial network. President Trump has already threatened to cut off any trade relations with any country that has dealings with North Korea in the wake of hydrogen bomb test. In August, U.S. Treasury department announced that more Chinese entities could be put to the sanctions list.

Things were somewhat settling down and China earned favor in the United States when it joined other members of the United Nation’s Security Council in imposing new tougher sanctions on North Korean exports aimed to reduce Pyongyang’s revenue by almost a third. However, things have turned for the worse over the past few weeks as North Korea tested several ballistic missiles and a hydrogen bomb.

China’s big four state-owned banks, who are the world’s biggest in terms of assets since, would be hard hit by sanctions given recent efforts to expand into the United States with lending, bond issuance and trade financing operations. According to rankings by S&P Global Market Intelligence, the Industrial and Commercial Bank of China is currently the world’s biggest bank, with USD$3.47 trillion in total assets as of the end of 2016.China’s other major state-owned lenders fill out the list of the world’s top four banks in the world, with China Construction Bank, Agricultural Bank of China and Bank of China laying claim to asset balances of between $2.60 trillion and $3.02 trillion. Due to their size and market impact, U.S. may be reluctant to impose all-out sanctions on them but even a limited sanctions will have a massive jolt.