China is concerned it could be hit by western sanctions imposed on Russia for its invasion of Ukraine and will retaliate if necessarythe Chinese foreign minister has said.

“China is not a party to the crisis, nor does it want sanctions to affect China,” Wang Yi told his Spanish counterpart, José Manuel Albares, in remarks published by the Chinese foreign ministry on Tuesday. “China has a right to safeguard its legitimate rights and interests,” he added.

The comments come a day after Jake Sullivan, US national security adviser, met Yang Jiechi, China’s top foreign policy official, in Rome for what one US official described as an “intense” seven-hour exchange that included discussion of Russia’s invasion of Ukraine.

Reports that China is prepared to help Russia are beginning to unsettle investors. The Hang Seng index yesterday fell by almost 6 per cent to its lowest closing level since 2016.

Falls in Chinese stock markets in Shanghai and Shenzhen are being exacerbated by a serious outbreak of Covid-19 and subsequent lockdowns in the affected cities and regions.

More on Ukraine

Follow our live blog and updated maps for the latest on the conflict.

Five more stories in the news

1. Russia signals progress on the Iran nuclear deal Russia said it had received guarantees from the US that sanctions imposed on Moscow would not affect its trade with Iran, potentially removing a stumbling block that had complicated attempts to revive Tehran’s 2015 nuclear accord with global powers.

2. Investors wary of Taiwan-China conflict International investors are seeking to hedge against the possibility of military conflict between China and Taiwan, as Russia’s invasion of Ukraine drives a reassessment of risk in one of the world’s most dangerous geopolitical flashpoints.

3. Leissner’s 1MDB trial testimony shines light on fraud Testimony from Tim Leissner, former Goldman Sachs partner, in the long-awaited trial of ex-Goldman banker Roger Ng has provided a unique window into one of the key players in an embezzlement scheme that US officials have labelled “kleptocracy at its worst”.

4. British publishers censor books to appease China Two British publishers, Octopus Books and Quarto, have censored books intended for western readers to ensure they can be printed cheaply in China, in the latest instance of companies yielding to Beijing’s restrictions on free speech.

5. Raskin withdraws nomination for top Fed watchdog role Sarah Bloom Raskin, Joe Biden’s pick to lead financial regulation at the Federal Reserve, withdrew her nomination after the centrist Democrat Joe Manchin joined Republicans in opposing her confirmation. Raskin blamed “relentless attacks by special interests” for her decision.

Coronavirus digest

• Shanghai teeters on the edge of a citywide lockdown despite reporting only about 150 new cases yesterday.

• Benchmark oil prices fell below $100 a barrel for the first time since March 1 on expectations that lockdowns could slow petroleum demand in China, the world’s largest importer of crude.

• Informa said it remained confident about the future of in-person eventsas the world’s largest exhibitions company returned to profit and shrugged off further Covid-related lockdowns in China.

The day ahead

Nato defence meeting Ministers are set to gather in Brussels to discuss what further steps to take in relation to the Ukraine crisis. Sign up for Valentina Pop’s Europe Express newsletter for the latest from the continent.

Japan January industrial production figures Final year-on-year factory output measures for January are set to be released today. Preliminary results released last month showed Japan’s industrial production fell at its fastest pace in a year in January.

Federal Reserve interest rate decision The US central bank is set to raise interest rates for the first time since 2018, but faces a dilemma over how aggressively to tighten monetary policy as war in Ukraine threatens to dent growth and worsen the highest inflation in 40 years.

What else we’re reading

What Japanese car auctions mean for the global economy Japan’s used car exports should be seen as the thermometer of the world economy, said Sanshiro Fukao, a senior research fellow at the Itochu Research Institute. Since late February, the abrupt slowdown of shipments to Russia has caused everyone to rip up the old calculations.

Will ‘open-source’ vaccines narrow the inequality gap? Spearheaded by the World Health Organization a new scheme to create mRNA vaccines aims to erase the unfair distribution of jabs during the pandemic. The unlikely setting for this radical overhaul: a series of nondescript warehouses on a Cape Town industrial estate.

Budget to beat the rising cost of living The FT’s moneymaking expert Claer Barrett is back with a new series of Money Clinic. This week she comes up with tips to make your budget stretch further as pretty much everything we buy goes up in price.

The Soviet pipeline that keeps Europe hooked on Moscow’s oil Europe relies on Russia for 30 per cent of its oil. While Most of the oil and associated petroleum products come by sea, the biggest single flow of Russian crude into Europe — almost 1mn barrels a day — comes via the 5,000km Druzhba (Friendship) pipeline.

Hiking

Looking for hikes in Hong Kong? Step back in time on these four historical trails that take in overgrown wartime ruins, incredible feats of Victorian engineering and an ancient stone circle.