China ‘preparing for war with US’ says expert
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China’s credit card processor has refused to work with banks in Russia for fear of being targeted by sanctions over its war with Ukraine, according to reports. Some Russian outlets have suggested that China’s UnionPay system will no longer help commercial banks in Russia like Sberbank and other smaller institutions. UnionPay was initially thought to have bailed Russia out after Visa and Mastercard suspended operations in the country.
It is unclear to what extent the reports are true as Russian media outlets failed to state their sources.
However, it is certain that, In the run-up to Vladimir Putin’s invasion of Ukraine, Russia and China forged unprecedented economic and diplomatic ties.
Many concluded that China would as a result step to Russia’s aid following any western sanctions.
But Beijing has so far appeared reluctant to help its neighbour out, likely for fear of economic reprisal from the US and Europe.
However, Andrew Small, Senior Transatlantic Fellow at the German Marshall Fund, says this may not be for long.
He told Express.co.uk that the countries’ strengthening ties meant it was only a matter of time before President Xi Jinping intervenes to help Russia financially.
The most likely source of this aid, he said, would be financial entities bound to the state.
Mr Small explained: “As things stand, with all the things Russia has introduced to prop up the ruble, we haven’t seen the need for financial assistance on the Chinese side.
“But, if there were to be certain forms of financial support extended later on, it would likely come from a state institution rather than broad based economic interactions.
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“I think there is still a question of when this would be needed and when Russia would be asking — and what it would amount to.
“There will be certain circumstances where Chinese support will be necessary, but some of these things would be harder for the West to sanction, like state financial entities.
“To sanction these things would be a significant step to take for the US and Europe.
“Equally, China is aware — we’ve seen the willingness to go after the Russian Central Bank — that it can’t rule out the possibility that measures could be taken against forms of state support for Russia.
“But I think it’s expected that there will be circumstances further down the line that China will want and need to provide certain forms of economic support to Russia.
“It will be a big political question when that moment comes.”
This week, Vice Foreign Minister Le Yucheng met with Russian envoy Andrey Ivanovich Denisov in Beijing to discuss their countries’ future relationship.
Mr Le said China will continue strengthening strategic ties with Russia and ensure that their relationship remains solid.
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He cited figures that showed a near 30 percent jump in trade between the nations during the first three months of 2022, saying they demonstrated “the great resilience and internal dynamism of bilateral cooperation.”
But, while bilateral trade did grow in the first quarter, much of that was before the Ukraine invasion.
Chinese exports to Russia actually slumped in March to the lowest level since mid-2020, according to newly released data.
Bloomberg analysis suggested that “increasing sanctions on Russia by many nations, the drop in the Russian currency and US efforts to stop Russia from using the dollar probably pushed Chinese firms to hold back on exports”.
However, following his meeting with Mr Denisov , Mr Le said in a statement: “No matter how the international landscape may change, China will continue to strengthen strategic coordination with Russia for win-win cooperation, jointly safeguard the common interests of the two countries and promote the building of a new type of international relations and a community with a shared future for mankind.”
Mr Denisov said Russia regards relations with China as a “diplomatic priority”.
China has been warned by both the EU and US not to undermine sanctions and help prop up Russia.
In early April, EU commission President Ursula von der Leyen told Xi that China risks losing the privileged access it currently has to western and European markets.
She said: “We expect China, if not supporting the sanctions, at least to do everything not to interfere in any kind.
“No European citizen would understand any support for Russia’s ability to wage war.
“Moreover, it would lead to a major reputational damage for China here in Europe — the reputational risks are also the driving forces in the exodus of international companies from Russia.”
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