United States Gov Is Fighting Chinese Banks For Alleged Role in Supporting Russia’s War in Ukraine
Jose Nino
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The United States government recently rolled out sanctions that threaten to deplatform Chinese banks from the global financial system. The reason for this move is due to China’s alleged role in backing Russia’s military campaign in Ukraine.
Since Russia invaded Ukraine on February 24, 2022, trade between China and Russia has exploded largely due to how Russia had been deplatformed from the financial system.
In turn, Russia sought to find a new trading partner to cope with the latest set of sanctions and economic embargoes.
As a result of this heightened trade between the two Eurasian nuclear powers, Russia has been able to build and sustain a formidable war machine.
China is currently the main supplier of aircraft parts, circuitry, machines, and machine tools for Russia’s war machine.
The Collective West is particularly worried that Russia could defeat Ukraine in a war of attrition if the US and its NATO countries can’t muster the industrial resources to confront Russian production. This largely explains Secretary of State Antony Blinken’s visit to Beijing on April 23, 2024, where he threatened to impose sanctions on China for its alleged role in propping up Russia’s economy.
Blinken threatened to deprive Chinese banks of access to the dollar and even fray Europe’s economic ties with China. These banks generally serve as critical intermediaries for commercial exports to Russia, provide credit to client companies for trade transactions, and the management of payments.
American officials argue that targeting banks with sanctions is a punitive option in the case of diplomatic efforts to persuade Chinese authorities to halt its exports. American officials have dialed up the pressure on Chinese authorities in recent weeks in private meetings and calls, cautioning that American authorities are ready to take action against Chinese financial institutions dealing with trade in so-called “dual-use” goods.
American officials believe that the combination of Western diplomatic pressure and a supposedly weak relation between China and Russia will be enough to prevent the consummation of an alliance. Denying banks access to the dollar—the denomination of the bulk of global trade— is a tool of last resort. These kind sanctions usually cause banks to fail, which impacts their whole customer and client base, and could be risky for China as the country deals with ever-growing credit problems.
This exercise by the US is futile in nature. Russia and China have every reason to pact with one another given how the US has pushed them together thanks to its hawkish foreign policy towards both countries
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