There is growing evidence of China’s limited willingness and ability to help Russia.
China distances itself from Russia / photo REUTERS
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The “borderless” friendship between China and Russia seems to have cracked. Although the PRC is neutral regarding the war in Ukraine, Russia’s isolated economy does not help strengthen relations between the countries.
Writes about it CNN.
Now that Russia’s economy has been hit by sanctions from around the world, there is growing evidence that China’s willingness and ability to help its northern neighbor may be limited.
China is Russia’s No. 1 trading partner, but Beijing does not consider this market the main and most promising. China has other economic priorities.
Trade between the countries accounted for only 2% of China’s total trade. At the same time, the EU and the US have much larger shares.
Over the past two weeks, Beijing has taken action in four areas to distance itself from the isolated Russian economy.
- China is not saving the ruble. The yuan does not trade completely freely, instead moving within limits set by People’s Bank of China officials. Last week, they doubled the ruble’s trading range, which contributed to the ruble’s faster fall. Beijing does not render any services to Moscow at the exchange rate of the ruble.
- Refusal to convert reserves. This is the most important assistance that China could provide to Russia. The Russian Federation has $90 billion in yuan, but China has not allowed this money to be converted into dollars or euros. Beijing understands the reputational risks, so it does not dare to do so.
- Ban on the export of aircraft parts. China refused to send aircraft parts to Russia after the cancellation of deliveries from Europe and the United States. The Russian Federation is trying to negotiate spare parts with Turkey and India.
- Freeze investment in infrastructure. In early March, the Asian Infrastructure Investment Bank in Beijing “in the interests of the bank” withdrew from all projects related to the Russian Federation and Belarus, “as the war unfolds in Ukraine.” The bank froze US$1.1 billion in accepted or proposed loans aimed at improving Russia’s road and rail network.
According to UNIAN, on March 8, the head of the People’s Republic of China, Xi Jinping, in a conversation with French President Emmanuel Macron and German Chancellor Olaf Scholz, said that he was in favor of negotiations between Ukraine and the Russian Federation. According to Xi Jinping, the urgent task now is to prevent the tense situation from escalating or getting out of control.
On March 12, the Financial Times wrote that the Russian leadership asked China provide weapons and other military assistance.
According to the publication, the White House is concerned that Beijing could undermine the efforts of Western countries that are helping Ukraine in the war with Russia.
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