The war between Russia and Ukraine continues. In return, the US and many of its allies have imposed heavy sanctions on Russia. Until now, China, which had been opposing the sanctions on Russia, is now silently distancing itself from Moscow.
Just last month, before launching military operations against Ukraine, the two countries declared that their friendship had “no boundaries.” CNN reported that Beijing has refused to condemn Russia’s attack on Ukraine, but wants to avoid being affected by sanctions itself, so it has repeatedly talked about solving the crisis.
There are fears that Chinese companies may face US sanctions on ties with Russia. That slowdown was reversed on Wednesday when Beijing promised it would pursue policies to boost its booming economy and keep financial markets stable.
US officials told CNN that they have information that China has expressed some openness to provide military and financial aid after Russia’s request. China dismissed the news as a “propaganda”.
China trying to strike a delicate balance
Citing analysts, CNN reported that China is trying to strike a delicate balance in supporting Russia, without further opposing the US.
Chinese banks cannot afford to lose access to the US dollar, and many Chinese industries cannot afford to be deprived of US technology either.
According to CNN, in a research report, Alicia García-Herrero, chief economist for Asia Pacific at Natixis, wrote, China’s most important aid to Russia is through a reserve of USD 90 billion, which is in Chinese yuan in Moscow.
Russia wants to use yuan reserve
It further reported that Russia’s Finance Minister Anton Siluanov said this week that the country wanted to use yuan reserves after Moscow was barred from access to the US dollar and euro.
After the invasion of Ukraine, the World Bank has halted all its programs in Russia and Belarus. It has not approved any new loans or investments to Russia since 2014, and has not granted any loans to Belarus since 2020.
Very surprisingly, according to CNN, this is the decision of the Beijing-based Asian Infrastructure Investment Bank to do so. In a statement earlier this month, it said that after the war in Ukraine broke out, it was suspending all its activities involving Russia and Belarus. The move is in the “best interest” of the bank.
America’s warning to China
CNN reported that the AIIB’s decision to suspend activities in Russia means that US$1.1 billion of approved or proposed lending aimed at improving the country’s road and rail network has been withheld.
On Friday (local time), US President Joe Biden held a video call with his Chinese counterpart Xi Jinping and warned China that if Beijing provides material aid to Russia, there will be wrong consequences.
Russia-Ukraine war: Russia fired rockets at Ukrainian soldiers sleeping in military barracks, at least 50 killed
A White House readout said, “President Biden detailed our efforts to prevent and then respond to the aggression, including inflicting costs on Russia. He noted the implications and consequences if China provides material assistance to Russia, Because it is carrying out brutal attacks against the cities and citizens of Ukraine.”
Meanwhile, the two leaders agreed to find a diplomatic solution to the current conflict in Ukraine, which is most needed at the moment.
,