2024-04-23 16:07:05
As the United States formulates sanctions once morest Chinese banks that helped Russia rebuild its war machine, questions arise regarding the significance of the move and whether it will affect booming trade between Beijing and Moscow .
The newspaper states Wall Street Journal Washington intends to impose sanctions on Chinese banks to isolate them from the global financial system if diplomatic efforts fail, according to sources familiar with the matter.
The newspaper report coincides with a visit by US Secretary of State Anthony Blinken to Beijing on Tuesday.
Since Russia’s invasion of Ukraine began in February 2022, China has responded to Western warnings not to send weapons to Russia, but since Blinken’s trip to Beijing last year, Chinese exports commercial goods that also have military uses have increased.
With China now a major supplier of aircraft parts, machinery and machine tools, U.S. officials say Beijing’s aid has allowed Moscow to rebuild its military-industrial capacity damaged by war and sanctions Western.
The West now fears that Russia will overwhelm Ukraine in a war of attrition if the allies do not develop their own industries to keep up with Russian production.
Blinken and other senior officials have raised alarms among Western allies regarding Chinese behavior, including last week at the Group of Seven meeting in Italy.
As Blinken travels to China, officials are banking on the threat of Chinese banks losing access to dollars and the risk of upending trade relations with Europe and convincing Beijing to change course.
In this context, Blinken said last week that “China cannot have it both ways.” He added: “If, on the one hand, China claims to have positive and friendly relations with Europe and other countries, it cannot, on the other hand, fuel what represents the greatest threat to European security since the Cold War. »
The Wall Street Journal says Chinese banks act as a major intermediary for trade exports to Russia, handling payments and providing credit to corporate clients for trade transactions.
On Friday, Blinken said China was indirectly fueling the war in Ukraine by providing Russia with equipment it can use to expand its military capabilities.
“As for Russia’s defense industrial base, China is currently the largest contributor,” he told reporters following the G7 ministers’ meeting in Capri, adding that this issue “enables Russia to continue its aggression once morest Ukraine.
US officials confirm that sanctioning Chinese banks constitutes an escalation option in case diplomatic initiatives fail to convince Beijing to limit its exports to Russia.
US Treasury Secretary Janet Yellen warned earlier this month in meetings with her counterparts in Beijing that “all banks that facilitate large transactions that direct military or dual-use goods to the defense industrial base Russians expose themselves to the risk of American sanctions.
China, however, says it rejects “criticism or pressure” on its relations with Russia, which have strengthened since the invasion of Ukraine.
Are American threats successful?
In December, President Joe Biden signed an executive order giving the Treasury Department the authority to impose sanctions on banks that aid the Russian military-industrial complex.
But in the past, simply threatening to target banks produced short-term results, according to the Wall Street Journal.
Alexandra Prokopenko, a researcher specializing in Russian affairs at the Carnegie Center and a former employee of the Russian Central Bank, said this has led to restrictions in trade transactions between China and Russia, with major Chinese banks withdrawing from any role facilitating agreements.
But she noted that these banks have been gradually replaced by more obscure regional Chinese banks, little active in the dollar-denominated economy, and therefore less afraid of U.S. sanctions.
“Both Russians and Chinese are constantly adapting to new conditions,” says Prokopenko.
According to the Center for Strategic and International Studies in Washington, the number of shipments of major dual-use goods, including helicopter parts, navigation equipment and machines used to make precision parts for weapons and aircraft, went from just a few thousand per month. at nearly 30,000 per month.
“This ultimately allowed the Kremlin to accelerate the production of its weapons, including armor, artillery, missiles and drones, and provide an effective defense once morest a Ukrainian counterattack in 2023,” Max said Bergman, senior fellow at the Center for Strategic and Strategic Research. International studies.
At the start of the war, Beijing seemed responsive to Western calls to refrain from shipping military equipment to Russia, but the Chinese have since found alternative solutions.
A senior European diplomat based in Washington said: “The Chinese are not providing them with anything that looks like a weapon. The components we are talking regarding, such as chips, machines and tools, are components that Russia puts into its weapons. »
The diplomat believes that trade is a strategic investment for both the Chinese and Russian presidents, who have met dozens of times. He said: “I don’t think Vladimir Putin would have had the courage to start a war without understanding that the Chinese would do it. support it technologically.
Officials and analysts say Chinese shipments to Russia played an important role in reassembling Russian military equipment broken and destroyed during the first year of Ukraine’s 2022 invasion.
1713900051
#Chinese #banks #support #Russia #war #Ukraine #Washington
