- Dec 29, 2008
- 19,697
- 4,740
- 280
China clearly doesn’t want to be drawn any deeper than it has to into the diplomatic and rhetorical war over Ukraine, which may partly explain its move to aid the US and EU in tightening the sanctions on Russia.The recent visit of US Secretary of State Anthony Blinken to China and the Bank of China's subsequent decision to restrict Russian bank clients' transactions involving banks located in the EU, the United States, Switzerland and the UK, could be a coincidence.
It may, on the other hand, have been a PR exercise concocted in Beijing to appease Blinken over the ongoing war in Ukraine.
Or perhaps it could be a simple reflection of the diminishing role Russia actually plays in China's strategic and economic thinking.
What we know
We know from Finam bank -- as reported by Russian state broadcaster RBC and Frank Media, a Russian media outlet -- that the Bank of China has started to terminate Russian transactions in Chinese yuan, US dollars, Hong Kong dollars, and euros through its correspondent accounts. UniCredit and Akibank also reported the move.
Under existing sanctions, banks in sanctioning countries are forbidden from transacting directly with sanctioned Russian entities, but banks and firms in third-party countries like China are not explicitly prohibited from doing business with Russians under sanctions.
The West has so far declined to impose secondary sanctions, which would seek to prohibit transactions between sanctioned Russian entities and those based in non-western countries.
Russia blames the west, while China pivots
Russia, of course, blames the west. "The decision was not made by China, but rather by the EU and the US. That is how they are trying to ramp up the sanction pressure by choking off alternative channels in the form of yuan," Pavel Semyonov, chairman of the board of Modulbank, said.
He may have a point.
So the no-limits partnership now has limits.
It may, on the other hand, have been a PR exercise concocted in Beijing to appease Blinken over the ongoing war in Ukraine.
Or perhaps it could be a simple reflection of the diminishing role Russia actually plays in China's strategic and economic thinking.
What we know
We know from Finam bank -- as reported by Russian state broadcaster RBC and Frank Media, a Russian media outlet -- that the Bank of China has started to terminate Russian transactions in Chinese yuan, US dollars, Hong Kong dollars, and euros through its correspondent accounts. UniCredit and Akibank also reported the move.
Under existing sanctions, banks in sanctioning countries are forbidden from transacting directly with sanctioned Russian entities, but banks and firms in third-party countries like China are not explicitly prohibited from doing business with Russians under sanctions.
The West has so far declined to impose secondary sanctions, which would seek to prohibit transactions between sanctioned Russian entities and those based in non-western countries.
Russia blames the west, while China pivots
Russia, of course, blames the west. "The decision was not made by China, but rather by the EU and the US. That is how they are trying to ramp up the sanction pressure by choking off alternative channels in the form of yuan," Pavel Semyonov, chairman of the board of Modulbank, said.
He may have a point.
So the no-limits partnership now has limits.
