As Russia’s invasion of Ukraine rages into its fourth week, Moscow has reportedly asked Beijing for military and economic assistance as sweeping sanctions from the West continue to devastate the Russian economy.
Russian minister of finance Anton Siluanov said on March 13 that his country’s economic “partnership with China will still allow us to maintain the cooperation that we have achieved.”
Although both governments have publicly denied these claims, Beijing has shown increasing hesitation of becoming embroiled in the economic battle between Moscow and the rest of the developed world.
The Chinese regime has declined to condemn Russia’s invasion of Ukraine, which the Kremlin calls a “special military operation”; the U.S. has called upon Beijing to take a stand on the war.
China’s foreign ministry said last week that they would “continue normal trade relations” with Russia despite most European and American firms deciding to cut their losses and exit the now collapsed Russian economy. Despite this claim however, Beijing has been toeing a careful diplomatic line as they slowly distance themselves from Russia whilst also keeping up appearances with its Russian counterpart.
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‘Serious consequences’ for Beijing
U.S. national security advisor Jake Sullivan warned his Chinese counterpart of “serious consequences” if Beijing helps Russia wage its war against Ukraine, though what exactly that might entail remains shrouded in secrecy.
“We’re going to have this conversation directly with China and Chinese leadership, not through the media,” White House press secretary Jen Psaki told reporters during a press briefing on March 15.
Psaki said that Sullivan was “very direct about the consequences” during his meeting in Rome with China’s top foreign policy official, Yang Jiechi on March 14.
“But in terms of any potential impacts or consequences, we’ll lead those through private diplomatic channels at this point,” Psaki said.
During a call with Spain’s foreign minister Jose Manuel Albares on March 14, China’s foreign minister Wang Yi said, “China is not a party to the crisis, nor does it want the sanctions to affect China.”
Still, Wang said that “China has the right to safeguard its legitimate rights and interests,” according to an official notice of the call posted by the Chinese government.
Since the war began on Feb. 24, more than 2 million Ukrainians have since fled the country due to the war, which has killed thousands of soldiers on both sides. Most of the refugees have gone to nearby Poland even as Russia imposes “humanitarian corridors” urging Ukrainians to evacuate to either Russia or Belarus, which Ukrainian President Volodymyr Zelenskyy has claimed as “unacceptable.”
Russian economy hit hard
After relentless waves of sanctions imposed by the West, the Russian ruble has plunged more than 40 percent and is worth 100 rubles per U.S. dollar at the time of writing.
Russian stocks have also seen massive sell-offs and the Moscow stock exchange has remained closed since March 2 as authorities looked to stem the bleeding in local asset prices and have increased interest rates by over 20 percent in hopes of encouraging the public to leave their cash in Russian banks.
New sanctions announced by the U.S. and European Union also targeted the National Wealth Fund of the Russian Federation and the Ministry of Finance of the Russian Federation. In early March, U.S. President Joe Biden announced that Russian flights would be banned from U.S. airspace, following similar decisions by the EU and Canada. Russian airlines are also in jeopardy after the Kremlin reported that China has refused to send airplane parts following sanctions targeted at Russia’s private and public enterprises.
Key Russian banks have also been barred from the SWIFT international payments system, (which stands for Society for Worldwide Interbank Financial Telecommunication,) preventing them from accessing secure international communication and ostracizing them from most of the world’s financial system.
In addition, a growing number of Western corporations across all industries, such as Visa, Mastercard, McDonalds, Netflix, BMW, Ford, and Starbucks have since pulled out of the Russian market as they join in on punishing Moscow for Ukraine’s invasion.
Gas giants BP Plc, Shell Plc and Exxon Mobil Corp. also took the energy industry by surprise when they walked away from Russian assets worth billions of dollars days after the invasion began.