The United States is drafting sanctions that threaten to cut some Chinese banks out of the global financial settlement system, with which US officials hope to end Beijing’s commercial support for Russian military production, the Wall Street Journal reported, citing people familiar with the matter.
China has heeded Western warnings since the start of Russia’s war in Ukraine not to send arms to Moscow, but since Anthony Blinken’s visit to Beijing last year, Chinese exports of commercial goods that also have military uses have soared. With China now a major supplier of electronic devices, aircraft parts, machinery and metalworking machinery, senior US officials point out that Beijing’s aid has allowed Moscow to rebuild its military industrial capacity.
The news comes just ahead of Secretary of State Anthony Blinken’s visit to China this week, with the question of whether this powerful financial threat could hamper trade between China and Russia, which is allowing Moscow to rebuild military production after its losses in Ukraine. financial publication cited by BNR.
Last Friday, Blinken criticized China’s support for Russia’s defense industry, saying Beijing was the main supplier for Moscow’s war in Ukraine by providing critical weapons components, Reuters noted.
In recent weeks, a number of US officials have stepped up pressure on China, warning that Washington is ready to take action against Chinese financial institutions that facilitate trade in goods that have “dual uses” – both civilian and military.
The People’s Bank of China and the National Financial Regulatory Administration (China’s banking regulator) did not respond to Reuters requests for comment on the Wall Street Journal report.
China and Russia have encouraged more trade in yuan instead of dollars since the Ukraine war, an effort that could protect their economies from potential escalating U.S. sanctions, the agency said.
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