China Worried About ‘Spillover’ From Russia Sanctions

Chinese Foreign Minister Wang Yi speaking at the Lanting Forum on China-US relations in Beijing, China, on Feb. 22, 2021. (Greg Baker/AFP via Getty Images)

China, which has not condemned Russia for invading Ukraine, has raised concerns about the “spill-over effect” of the widespread international sanctions slapped on Moscow.

“Both [China and Pakistan] expressed concerns about the spill-over effects of unilateral sanctions,” Reuters reported the Chinese foreign ministry said after China’s foreign minister Wang Yi met with his Pakistani counterpart Shah Mahmood Qureshi on March 21. “Both called for a ceasefire through diplomatic dialogue and hope that based on the principle of indivisible security, a fundamental solution to the Ukraine problem can be found.”

The foreign ministry of Pakistan issued a statement calling for a ceasefire but did not mention any concern about the Western sanctions. Like China, Pakistan has avoided condemning Russia for its invasion.

The comments of the Chinese foreign ministry came a few days after vice foreign minister Le Yucheng referred to the sanctions as “more and more outrageous” while speaking at a security forum in Beijing. Russian citizens are being deprived of their foreign assets “for no reason,” the minister said.

“History has proven time and again that sanctions cannot solve problems. Sanctions will only harm ordinary people, impact the economic and financial system ... and worsen the global economy.”

Yucheng also took Moscow’s side by stating that NATO should not expand eastward anymore. NATO’s pursuit of “absolute security” is leading to “absolute non-security,” Yucheng said while warning that pushing a nuclear power like Russia into a corner will be “even more unimaginable.”

Although China has not officially condemned Russia for invading Ukraine, it hasn’t yet provided Moscow with any support for the war.

For instance, Western sanctions are preventing aircraft manufacturers Airbus and Boeing from supplying parts to Russian airlines. The same holds true for manufacturers of jet engines. Not getting parts on time means that Russia might fly planes that don’t adhere to proper safety and maintenance standards. China has refused Russia’s request to supply aircraft parts.

Similarly, the Asian Infrastructure Investment Bank based in Beijing has suspended all activities in Russia and Belarus following the Ukraine invasion, stating that such a move was in the best interests of the bank. The decision will put on hold $1.1 billion worth of lending aimed at improving Russia’s road and rail networks.

Beijing has also not yet allowed Moscow to convert its yuan reserves to euros or U.S. dollars, something that would be very beneficial for Russia at the present moment. The reason Beijing refused such a request might be because it is not in China’s economic interests, Alicia García-Herrero, chief economist for Asia Pacific at Natixis, told CNN.

“The reputational risk of potentially breaching Western sanctions would be a huge step for the PBOC [Chinese central bank] to take and therefore makes it highly unlikely,” she said. “The long-term gains of moving closer to Russia might not match the impact of Western investors suddenly losing interest in China.”