The US is developing sanctions that could cut some Chinese banks out of the global financial system. Washington expects that this will force Beijing “to end commercial support for Russia’s military industry,” reports The Wall Street Journal (WSJ).
The publication said that the assistance of the Chinese side “allowed Moscow to restore its military-industrial potential”, as China became the main supplier of electronic circuits, aircraft parts, machinery and metal-cutting machines for the Russian Federation. Banks are said to serve as key intermediaries in trade exports to Russia, processing payments and providing trade credit to client companies
However, US officials have acknowledged that imposing sanctions on the banks would be an “escalation option” if diplomatic efforts fail to persuade Beijing to limit its exports to the Russian Federation. According to the WSJ, US officials have stepped up pressure on Beijing in recent weeks in private meetings and phone calls, warning that Washington is ready to take action against Chinese financial institutions involved in trading sensitive goods.
US officials hope that “cumulative diplomatic pressure” from the West will prevent “the need to take actions that could destroy the fragile truce” between the US and China. The WSJ clarifies that depriving banks of access to the dollar “has a much broader impact than normal sanctions” and is used as a last resort because it often drives credit institutions into bankruptcy, which “poses a particular risk for China as the country struggling with growth credit problems.”
Tomorrow, April 24, US Secretary of State Anthony Blinken will arrive on a three-day visit to China. His trip was preceded by a series of contacts between US and Chinese officials, including a telephone conversation between the leaders of the two countries in early April. In recent weeks, the US has increasingly accused China of supporting the Russian military-industrial complex. One of the goals of Blinken’s visit to China is for China to stop providing material and technical assistance to Moscow.
