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US ‘Looking Closely’ at China Banks Over War Aid to Russia

Earlier this week a top US official called on European and NATO countries to send a collective message of concern to China


China's President Xi Jinping and Russia's President Vladimir Putin shake hands during the Shanghai Cooperation Organization summit
China's President Xi Jinping and Russia's President Vladimir Putin shake hands during the Shanghai Cooperation Organization summit in June 2018. Photo: Reuters

 

A top US official has reiterated the threat of possible sanctions on Chinese firms and financial institutions, citing concerns over Beijing’s support for Russia’s invasion of Ukraine.

“Where we are primarily focused are on Chinese companies that have been involved in a systematic way in supporting Russia,” US Deputy Secretary of State Kurt Campbell said on Friday when asked if the Chinese leadership and banks could be targeted.

“We’ve also looked closely at financial institutions.”

 

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Campbell’s comments come days after he said that European and NATO countries needed to send a collective message of concern to China.

“There will be steps that are taken, not just by the United States, but other countries, signalling our profound displeasure about what China is seeking to do in its relationship with Russia on the battlefield in Ukraine,” he said on Friday.

Campbell also met China’s Vice Foreign Minister Ma Zhaoxu on Thursday and raised US concerns about Beijing’s support to Russia’s defence industrial base undermining European security, the State Department said.

The Joe Biden administration has stepped up warnings about China’s backing for Moscow in recent months. In December, Biden issued an executive order threatening punitive measures against financial institutions helping Russia skirt Western sanctions.

 

China vows countermeasures

Meanwhile, on Friday, Chinese state-media vowed retaliation from Beijing in case of further US sanctions.

China has more powerful countermeasures, if the United States continues to violate and endanger the country’s sovereignty and security interests on core issues, or squeeze the development of Chinese firms, state media said.

The remarks came from a social media post from Yuyuan Tantian, which is affiliated with Chinese state broadcaster CCTV, that quoted sources with government knowledge on foreign policy.

China has maintained a close relationship with Moscow, after the two signed a “no limits” partnership days before Russia began its invasion of Ukraine.

Earlier this month Putin made a two-day state visit to China at the invitation of President Xi Jinping. In a joint statement, the two leaders condemned the US and pushed for a political settlement to the war in Ukraine.

 

‘US secure only if Asia secure’

At a separate event, US Defense Secretary Lloyd Austin also took aim at Beijing, shortly after meeting his Chinese counterpart, Dong Jun.

“Let me be clear: The United States can be secure only if Asia is secure. That’s why the United States has long maintained our presence in this region,” Austin said at the annual Shangri-La Dialogue security summit in Singapore.

Austin stressed on the “peaceful resolution of disputes through dialogue and not coercion or conflict. And certainly not through so-called punishment.”

Austin’s statement were a shot at China, which conducted “punishment” drills around Taiwan — the democratically governed island it claims as its own territory.

Beijing also released a short video showing a simulated invasion of Taiwan.

The US, meanwhile, has set aside about $8 billion in funding for countering China in the Indo-Pacific. The Biden Administration has also continued to pledge military aid to Taiwan, despite threats from China against doing so.

Last year, a top US spy said warned a Chinese invasion of Taiwan would wipe off $1 trillion per year from the world’s economy.

Taiwan is a key link in the global technology supply chain for companies such as Apple and Nvidia. It is also home to the world’s largest contract chipmaker, TSMC, whose semiconductors power 90% of “almost every category of electronic device around the world.”

 

  • Reuters, with additional editing by Vishakha Saxena

 

Also read:

US Warns China of Sanctions: ‘Helping Russia Threatens Europe’

China Providing 90% of Chips Used in Russia, Despite Sanctions

Chinese, Russian Firms Agree Multiple Deals as Ties Deepen

Chinese Loans to Russia Quadruple Since Ukraine War – FT

20 China Firms Among 300 Sanctioned by US Over Russian War

Blinken Meets Xi, Warns on China’s Support for Russian War

China-Russia Trade ‘Goes Underground’ as Big Banks Pull Back

Drone Maker DJI Next Likely Target of US China Hawks – NYT

US May Sanction Chinese Banks Helping Russian War — WSJ 

NATO Warns China: Good Ties at Risk, if You Keep Backing Russia

 

 

Vishakha Saxena

Vishakha Saxena is the Multimedia and Social Media Editor at Asia Financial. She has worked as a digital journalist since 2013, and is an experienced writer and multimedia producer. As a trader and investor, she is keenly interested in new economy, emerging markets and the intersections of finance and society. You can write to her at [email protected]

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