Over 26 months have passed since Russia’s latest invasion of Ukraine. The current stalemate has given way to gradual advances by Russia, as political support for arming Ukraine waned in Western capitals, at least until a breakthrough U.S. funding bill last week. To counteract this inertia, Western leaders have increased pressure on one of Russia’s main backers: China. A growing number of officials have publicly called out Chinese support for Russia’s war machine and threatened punishment as deterrence. However, it is unclear whether Chinese actors will ultimately change course.
The E.U. has been worried about China’s potential complicity since the beginning of Russia’s war. In the South China Morning Post, Finbarr Bermingham reported that now the E.U. has planned on blacklisting more Chinese businesses for breaching sanctions on Russia:
European Union officials plan to inform Chinese diplomats on Friday about the intent to add more Chinese companies to a blacklist because they had helped Russia evade EU sanctions.
The Chinese companies stand accused of buying European-made goods that are not permitted to be sold to Russia, then exporting them to Russian military buyers.
The aim of the meeting is to enlist Beijing’s help in closing the loopholes, people familiar with the planning said.
Previous consultations like this have resulted in the removal of Chinese firms from a draft blacklist before it got published, after Beijing committed to stopping the trade. [Source]
Last week, NATO Secretary-General Jens Stoltenberg used unusually harsh words to warn China against supporting Russia’s war. He added, “They cannot have it both ways,” referencing China’s desire to maintain good relations with both the West and Russia. At the end of his recent trip to Beijing, as Phelim Kine at Politico reported, U.S. Secretary of State Antony Blinken threatened additional punishments if China continued to export materials that allow Russia to rebuild its industrial base:
Chinese state-owned firms are providing key components for Russia’s defense industrial base, including microelectronics and machine tools that have “a material effect against Ukraine” and constitute “a growing threat that Russia poses to countries in Europe,” Blinken told reporters in a press briefing in Beijing on Friday.
Blinken said that, in his meetings with China’s leader Xi Jinping and Foreign Minister Wang Yi, he made clear that the Biden administration is running out of patience with Beijing’s refusal to stop that support.
“We’re looking at the actions that we’re fully prepared to take if we don’t see a change … we’ve already imposed sanctions on more than 100 Chinese entities, export controls and we’re fully prepared to take additional measures,” Blinken said. [Source]
These threats have led to some skeptical reactions in China. Wu Xinbo, dean of the Institute of International Studies at Fudan University in Shanghai, worried that the U.S. would continuously “raise the bar” on what it considers support for Russia’s war beyond lethal aid to areas Beijing considers “normal” trade. “It will be an endless process,” he told the Washington Post, adding, “If this time we bow to Blinken’s request to stop financial transactions, but the war continues and Ukraine keeps losing ground, then the U.S. will say ‘China, you should stop doing something else.’”
Chinese actors are already adapting to Western threats of retaliation. Reuters reported that while Chinese banks are throttling payments for Sino-Russian transactions, some Chinese firms have gone “underground” to continue their operations:
Now the threat of extending these [American sanctions against Russia] to banks in China – a country Washington blames for “powering” Moscow’s war effort – is chilling the finance that lubricates even non-military trade from China to Russia.
This is posing a growing problem for small Chinese exporters, said seven trading and banking sources familiar with the situation.
As China’s big banks pull back from financing Russia-related transactions, some Chinese companies are turning to small banks on the border and underground financing channels such as money brokers – even banned cryptocurrency – the sources told Reuters.
Others have retreated entirely from the Russian market, the sources said.
“You simply cannot do business properly using the official channels,” Wang said, as big banks now take months rather than days to clear payments from Russia, forcing him to tap unorthodox payment channels or shrink his business. [Source]
Despite the external pressure, “China’s ties with Russia are growing more solid,” The Economist wrote last week. On Friday, Chinese Defense Minister Dong Jun met with his Russian counterpart to reaffirm the importance of close bilateral ties: “In a volatile international environment, it is particularly important that the relations between our armed forces maintain a high dynamic and respond to the trends of the times. Our interaction is important for strategic stability on the planet.” In May, Vladimir Putin is expected to travel to China for talks with Xi Jinping.
Part of China’s covert support to Russia, according to U.S. officials, includes geospatial intelligence for military purposes, along with microelectronics and machine tools for tanks. In April, Kylie Atwood at CNN provided more details about the nature of Chinese support for Russia’s military campaign in Ukraine:
The support China is providing includes significant quantities of machine tools, drone and turbojet engines and technology for cruise missiles, microelectronics, and nitrocellulose, which Russia uses to make propellant for weapons, said the officials.
Chinese and Russian entitles have also been working jointly to produce drones inside of Russia, one of the officials said.
[…] As a demonstration of this deepening China-Russia partnership: in 2023, 90% of Russia’s micro-electronics imports came from China, which Russia has used to produce missiles, tanks, and aircraft, a second official said.
And Russia’s rapidly expanding production of artillery rounds is due, in large part, to the nitrocellulose coming from China, officials said. This comes as Russia appears on track to produce nearly three times more artillery munitions than the US and Europe, CNN reported earlier this year. [Source]
Last week, David Brennan and Yevgeny Kuklychev at Newsweek reported on various Chinese companies that have flouted U.S. sanctions in order to pursue business deals in Russia:
The ExpoElectronica conference is a prime annual opportunity for Russia’s most advanced tech companies to make deals with the country’s decision-makers; including those in the powerful security and military sectors.
But as they assembled in Moscow earlier this month for the 2024 installment, Russia’s tech leaders—represented by 369 companies—were almost outnumbered by 348 Chinese counterparts.
[…] The trajectory is reflected in the number of Chinese and Hong Kong exhibitors at recent ExpoElectronica events. Just 119 were present in 2023, 57 in 2022, and eight in 2021.
At least three companies exhibiting at this year’s ExpoElectronica have already been sanctioned by the U.S. for helping Russians evade international trade restrictions. [Source]
Chinese actors have also provided Russia with media support to amplify pro-Russian narratives of the war. Since the conflict began, Chinese censors have issued instructions to turn down the temperature on public sentiment about the war, limit independent engagement on the war, and keep Weibo posts about Ukraine favorable to Russia. As a result, anti-war voices and other content about the war have been suppressed on Chinese social media. Chinese state media has also reinforced Russian disinformation about the war. After the death of Russian opposition leader Alexei Navalny in February, Chinese state and commercial media largely echoed Russian government talking points.
Many in Washington, D.C. have emphasized the view of China and Russia as Cold War adversaries of the United States. Some American groups, such as the International Republican Institute, have gone further to argue that Russia and China pose an ongoing, coordinated authoritarian threat based on “their goal of weakening democratic institutions and bolstering autocratic governance worldwide”:
The Authoritarian Nexus: How Russia and China Undermine Democracy Worldwide is a compendium of nine country case studies, covering Central African Republic (CAR), Libya, Sudan, Argentina, Chile, Bosnia and Herzegovina, Montenegro, North Macedonia, and Serbia. The report examines how the corrosive actions of authoritarian actors overlap and complement one another and, assesses their impact on democratic norms and institutions. The case studies shed light on how powerful malign states try to influence the politics and governance of other nations to achieve favorable outcomes for their respective interests.
Each case is unique. In Bosnia and Herzegovina, Russian troll farms are indirectly helped by China’s efforts to undermine information integrity. In Montenegro, China and Russia take advantage of deep divides in the population and the media to push their agendas. In North Macedonia, although the research did not find direct cooperation between China and Russia, the two countries rely on the same tactics to pressure local leadership. And in Serbia, the West’s disengagement has boosted Russia and China’s influence.
Both nations exploit weak governments and empower corruption, sometimes in order to make business deals, sometimes in order to influence a country’s politics. To address Argentina’s economic challenges some local leaders are eager to partner with China and Russia, including in ways that undermine rule of law and contribute to democratic backsliding. In neighboring Chile, Russia and China do not appear to be working together, though both countries disseminate anti-U.S. disinformation and propaganda. [Source]
