As Russia’s isolation grows, China hints at limits of friendship

[Hamartia Antidote]

As Russia’s isolation grows, China hints at limits of friendship

Chinese state-owned financial institutions have been quietly distancing themselves from Russia’s beleaguered economy.

www.aljazeera.com

Chinese state-owned financial institutions have been quietly distancing themselves from Russia’s beleaguered economy.

As Russia’s economy gets hammered by sanctions, China has emerged as the key player with the potential to lessen its partner’s economic pain.

But amid Moscow’s deepening international isolation, there are growing signs that Beijing’s willingness to throw its strategic partner an economic lifeline may only go so far.

Even as Beijing has refused to term Russian President Vladimir Putin’s assault on Ukraine an “invasion” and condemned Western-led sanctions, Chinese state-owned financial institutions have been quietly distancing themselves from Russia’s beleaguered economy.

The moves suggest a careful balancing act by Beijing as it seeks to buttress ties with Moscow without openly violating sanctions, which could jeopardise its access to key Western export markets and the US dollar-centric international financial system.

Bank of China’s Singapore operations recently ceased financing deals involving Russian oil and firms, the Reuters news agency reported on Monday, citing a source familiar with the situation.

The report followed a Bloomberg article on Saturday that said the Bank of China and Industrial & Commercial Bank of China had restricted financing for purchases of Russian commodities.

Alicia García Herrero, chief Asia Pacific economist at Natixis in Hong Kong, said she expected Beijing to comply with US sanctions while continuing to support the Russian economy through the Chinese financial system.

“As far as banks are concerned, they can lend in RMB and basically there is a number of things you cannot do, but there is a huge number of things you can still do,” García Herrero told Al Jazeera. “Even European banks can still finance energy imports, so why would Chinese banks not do it if European banks are going to do it, at least so far?”

“So in other words, they will comply with the letter of the law, but in my opinion, not the spirit of the law,” García Herrero added, describing Chinese banks’ recent actions as a “reflection of existing sanctions” but not a development that “means more”.

Close ties​

Beijing and Moscow have forged close ties in recent years, often aligning to oppose what they view as interference by the US and its allies.

Earlier this month, Putin held talks with Chinese President Xi Jinping in Beijing, where the two leaders declared that friendship between their countries had “no limits” and no “forbidden” areas of cooperation.

The meeting resulted in a raft of trade deals, including the signing of a 30-year contract for Russia to supply gas to China via a new pipeline. China’s trade with Russia rose to $146.9bn in 2021, according to Chinese customs data. Although up 36 percent year-on-year, that figure still remains only about one-tenth of the volume of the China’s combined trade with the US and EU.

While calling all parties involved in the Ukraine crisis to “exercise restraint”, Beijing has declined to condemn Russia’s invasion and expressed opposition to “all illegal unilateral sanctions”.

Last week, Chinese customs authorities announced the lifting of import restrictions on Russian wheat, global exports of which are worth $7.9bn annually, as part of the package of agreements sealed between Beijing and Moscow earlier this month.

The United States, European Union, United Kingdom, Japan, Canada and Australia have unveiled a raft of punitive measures against Moscow, which include expelling some Russian banks from the SWIFT international payments system, blocking Russia’s central bank from using its foreign reserves to support the value of its currency, and banning broadcasts of Russian state media.

The Russian rouble plunged to a record low against the dollar on Monday, sinking as much as 30 percent in Asian trading, fueling expectations of a run on Russian banks.

Cheng-Yun Tsang, an expert in financial regulation at National Chengchi University in Taiwan, said China would be cautious about any action that could threaten its access to the international financial system.

“We all know that China holds the biggest forex exchange reserves globally, and among them, the US dollar dominates,” Tsang told Al Jazeera.

“It’s also noteworthy that China’s foreign exchange reserves fell around $28bn to $3.22 trillion in January this year. China also relies heavily on the SWIFT system. These facts might well lead China to a somewhat prudent move when it comes to providing financing with Russia, as jeopardising its own ability to transact in US dollars would never be a good idea.”

Tsang said Beijing’s moves to distance itself from Moscow appeared mostly symbolic, inflicting little actual pain on the Russian economy.

Beijing could find its balancing act harder to maintain if the US and its allies were to push for more severe sanctions down the track. Although expected to deal a significant blow to Russia’s economy, the sanctions blitz has largely spared the country’s lucrative energy industry due to fears of collateral damage to Western countries. Russia, the world’s third-largest oil producer and the second-largest producer of natural gas, provides about 40 percent of Europe’s supply of natural gas.

Gary Ng, an Asia economist at Natixis, said the current sanctions regime gives China considerable room to continue legitimate trade with Russia.

“With China’s support, the pressure on Russia will definitely be less, especially for financial linkages. This is especially true as Russia is isolated and China is the only country with meaningful economic size that can offer help,” Ng told Al Jazeera.

“The real tricky moment will come if the US expands the scope and enforces secondary sanctions, which will become a tug-of-war between China’s support for Russia versus whether the West is willing to pressure or put secondary sanctions on China given its large role in global trade.”

Ng said the pressure campaign could prompt ostracised countries to seek to “reduce dollar dependency and establish more cross-border payment systems”.

“This can hurt the effectiveness of sanctions over time, but a complete replacement of the dollar remains very unlikely,” he said.

 

[nang2]

Support for Russia from China won't be open and well known. If get caught, play ignorance. The key is to keep US focused and busy on Europe.

 

[mudas777]

As Russia’s isolation grows, China hints at limits of friendship

Chinese state-owned financial institutions have been quietly distancing themselves from Russia’s beleaguered economy.

www.aljazeera.com

Chinese state-owned financial institutions have been quietly distancing themselves from Russia’s beleaguered economy.

As Russia’s economy gets hammered by sanctions, China has emerged as the key player with the potential to lessen its partner’s economic pain.

But amid Moscow’s deepening international isolation, there are growing signs that Beijing’s willingness to throw its strategic partner an economic lifeline may only go so far.

Even as Beijing has refused to term Russian President Vladimir Putin’s assault on Ukraine an “invasion” and condemned Western-led sanctions, Chinese state-owned financial institutions have been quietly distancing themselves from Russia’s beleaguered economy.

The moves suggest a careful balancing act by Beijing as it seeks to buttress ties with Moscow without openly violating sanctions, which could jeopardise its access to key Western export markets and the US dollar-centric international financial system.

Bank of China’s Singapore operations recently ceased financing deals involving Russian oil and firms, the Reuters news agency reported on Monday, citing a source familiar with the situation.

The report followed a Bloomberg article on Saturday that said the Bank of China and Industrial & Commercial Bank of China had restricted financing for purchases of Russian commodities.

Alicia García Herrero, chief Asia Pacific economist at Natixis in Hong Kong, said she expected Beijing to comply with US sanctions while continuing to support the Russian economy through the Chinese financial system.

“As far as banks are concerned, they can lend in RMB and basically there is a number of things you cannot do, but there is a huge number of things you can still do,” García Herrero told Al Jazeera. “Even European banks can still finance energy imports, so why would Chinese banks not do it if European banks are going to do it, at least so far?”

“So in other words, they will comply with the letter of the law, but in my opinion, not the spirit of the law,” García Herrero added, describing Chinese banks’ recent actions as a “reflection of existing sanctions” but not a development that “means more”.

Close ties​

Beijing and Moscow have forged close ties in recent years, often aligning to oppose what they view as interference by the US and its allies.

Earlier this month, Putin held talks with Chinese President Xi Jinping in Beijing, where the two leaders declared that friendship between their countries had “no limits” and no “forbidden” areas of cooperation.

The meeting resulted in a raft of trade deals, including the signing of a 30-year contract for Russia to supply gas to China via a new pipeline. China’s trade with Russia rose to $146.9bn in 2021, according to Chinese customs data. Although up 36 percent year-on-year, that figure still remains only about one-tenth of the volume of the China’s combined trade with the US and EU.

While calling all parties involved in the Ukraine crisis to “exercise restraint”, Beijing has declined to condemn Russia’s invasion and expressed opposition to “all illegal unilateral sanctions”.

Last week, Chinese customs authorities announced the lifting of import restrictions on Russian wheat, global exports of which are worth $7.9bn annually, as part of the package of agreements sealed between Beijing and Moscow earlier this month.

The United States, European Union, United Kingdom, Japan, Canada and Australia have unveiled a raft of punitive measures against Moscow, which include expelling some Russian banks from the SWIFT international payments system, blocking Russia’s central bank from using its foreign reserves to support the value of its currency, and banning broadcasts of Russian state media.

The Russian rouble plunged to a record low against the dollar on Monday, sinking as much as 30 percent in Asian trading, fueling expectations of a run on Russian banks.

Cheng-Yun Tsang, an expert in financial regulation at National Chengchi University in Taiwan, said China would be cautious about any action that could threaten its access to the international financial system.

“We all know that China holds the biggest forex exchange reserves globally, and among them, the US dollar dominates,” Tsang told Al Jazeera.

“It’s also noteworthy that China’s foreign exchange reserves fell around $28bn to $3.22 trillion in January this year. China also relies heavily on the SWIFT system. These facts might well lead China to a somewhat prudent move when it comes to providing financing with Russia, as jeopardising its own ability to transact in US dollars would never be a good idea.”

Tsang said Beijing’s moves to distance itself from Moscow appeared mostly symbolic, inflicting little actual pain on the Russian economy.

Beijing could find its balancing act harder to maintain if the US and its allies were to push for more severe sanctions down the track. Although expected to deal a significant blow to Russia’s economy, the sanctions blitz has largely spared the country’s lucrative energy industry due to fears of collateral damage to Western countries. Russia, the world’s third-largest oil producer and the second-largest producer of natural gas, provides about 40 percent of Europe’s supply of natural gas.

Gary Ng, an Asia economist at Natixis, said the current sanctions regime gives China considerable room to continue legitimate trade with Russia.

“With China’s support, the pressure on Russia will definitely be less, especially for financial linkages. This is especially true as Russia is isolated and China is the only country with meaningful economic size that can offer help,” Ng told Al Jazeera.

“The real tricky moment will come if the US expands the scope and enforces secondary sanctions, which will become a tug-of-war between China’s support for Russia versus whether the West is willing to pressure or put secondary sanctions on China given its large role in global trade.”

Ng said the pressure campaign could prompt ostracised countries to seek to “reduce dollar dependency and establish more cross-border payment systems”.

“This can hurt the effectiveness of sanctions over time, but a complete replacement of the dollar remains very unlikely,” he said.

I am sure supa power India who ran off in the UNSC from voting will help his good old friend Russia in her hour of need. Russia have helped India countless times and you can see from the video's coming out of Ukraine how they are treating Indians. Can India do the surgical strike at the Ukraine or India is just a good times girl only and have no loyalty?

 

[Hamartia Antidote]

I am sure supa power India who ran off in the UNSC from voting will help his good old friend Russia in her hour of need. Russia have helped India countless times and you can see from the video's coming out of Ukraine how they are treating Indians. Can India do the surgical strike at the Ukraine or India is just a good times girl only and have no loyalty?

LOL! Who cares about India? You want to discuss Guatemala next?

 

[mudas777]

LOL! Who cares about India?

Now don't be breaking my heart, I only have got a problem with the fascist Modi and also as soon as IOK is returned to the Pakistan, will have a cup of tea and samosa in the Delhi market. My colleagues keeps on telling me its going to be a long wait but am a patient man, at the mean time they keep on getting me Haldi Ram sweets to get their promotions. Am a reasonable man easy to please, just vote out this Hindu terrorist so we can sit down across the table for the IOK return date to the Pakistan.
India is a supa power, QUAD member, UNSC member at the moment, US strategic partner and list is endless. Beaten China in the Galwan valley in the arm wrestling, done a surgical strike not long ago at the Pakistan soil killing a poor crow, so we all care..

 

[Wood]

How do we pronounce the band 'Ng'? It has to be the shortest name

 

[Zsari]

As Russia’s isolation grows, China hints at limits of friendship

Chinese state-owned financial institutions have been quietly distancing themselves from Russia’s beleaguered economy.

www.aljazeera.com

Chinese state-owned financial institutions have been quietly distancing themselves from Russia’s beleaguered economy.

As Russia’s economy gets hammered by sanctions, China has emerged as the key player with the potential to lessen its partner’s economic pain.

But amid Moscow’s deepening international isolation, there are growing signs that Beijing’s willingness to throw its strategic partner an economic lifeline may only go so far.

Even as Beijing has refused to term Russian President Vladimir Putin’s assault on Ukraine an “invasion” and condemned Western-led sanctions, Chinese state-owned financial institutions have been quietly distancing themselves from Russia’s beleaguered economy.

The moves suggest a careful balancing act by Beijing as it seeks to buttress ties with Moscow without openly violating sanctions, which could jeopardise its access to key Western export markets and the US dollar-centric international financial system.

Bank of China’s Singapore operations recently ceased financing deals involving Russian oil and firms, the Reuters news agency reported on Monday, citing a source familiar with the situation.

The report followed a Bloomberg article on Saturday that said the Bank of China and Industrial & Commercial Bank of China had restricted financing for purchases of Russian commodities.

Alicia García Herrero, chief Asia Pacific economist at Natixis in Hong Kong, said she expected Beijing to comply with US sanctions while continuing to support the Russian economy through the Chinese financial system.

“As far as banks are concerned, they can lend in RMB and basically there is a number of things you cannot do, but there is a huge number of things you can still do,” García Herrero told Al Jazeera. “Even European banks can still finance energy imports, so why would Chinese banks not do it if European banks are going to do it, at least so far?”

“So in other words, they will comply with the letter of the law, but in my opinion, not the spirit of the law,” García Herrero added, describing Chinese banks’ recent actions as a “reflection of existing sanctions” but not a development that “means more”.

Close ties​

Beijing and Moscow have forged close ties in recent years, often aligning to oppose what they view as interference by the US and its allies.

Earlier this month, Putin held talks with Chinese President Xi Jinping in Beijing, where the two leaders declared that friendship between their countries had “no limits” and no “forbidden” areas of cooperation.

The meeting resulted in a raft of trade deals, including the signing of a 30-year contract for Russia to supply gas to China via a new pipeline. China’s trade with Russia rose to $146.9bn in 2021, according to Chinese customs data. Although up 36 percent year-on-year, that figure still remains only about one-tenth of the volume of the China’s combined trade with the US and EU.

While calling all parties involved in the Ukraine crisis to “exercise restraint”, Beijing has declined to condemn Russia’s invasion and expressed opposition to “all illegal unilateral sanctions”.

Last week, Chinese customs authorities announced the lifting of import restrictions on Russian wheat, global exports of which are worth $7.9bn annually, as part of the package of agreements sealed between Beijing and Moscow earlier this month.

The United States, European Union, United Kingdom, Japan, Canada and Australia have unveiled a raft of punitive measures against Moscow, which include expelling some Russian banks from the SWIFT international payments system, blocking Russia’s central bank from using its foreign reserves to support the value of its currency, and banning broadcasts of Russian state media.

The Russian rouble plunged to a record low against the dollar on Monday, sinking as much as 30 percent in Asian trading, fueling expectations of a run on Russian banks.

Cheng-Yun Tsang, an expert in financial regulation at National Chengchi University in Taiwan, said China would be cautious about any action that could threaten its access to the international financial system.

“We all know that China holds the biggest forex exchange reserves globally, and among them, the US dollar dominates,” Tsang told Al Jazeera.

“It’s also noteworthy that China’s foreign exchange reserves fell around $28bn to $3.22 trillion in January this year. China also relies heavily on the SWIFT system. These facts might well lead China to a somewhat prudent move when it comes to providing financing with Russia, as jeopardising its own ability to transact in US dollars would never be a good idea.”

Tsang said Beijing’s moves to distance itself from Moscow appeared mostly symbolic, inflicting little actual pain on the Russian economy.

Beijing could find its balancing act harder to maintain if the US and its allies were to push for more severe sanctions down the track. Although expected to deal a significant blow to Russia’s economy, the sanctions blitz has largely spared the country’s lucrative energy industry due to fears of collateral damage to Western countries. Russia, the world’s third-largest oil producer and the second-largest producer of natural gas, provides about 40 percent of Europe’s supply of natural gas.

Gary Ng, an Asia economist at Natixis, said the current sanctions regime gives China considerable room to continue legitimate trade with Russia.

“With China’s support, the pressure on Russia will definitely be less, especially for financial linkages. This is especially true as Russia is isolated and China is the only country with meaningful economic size that can offer help,” Ng told Al Jazeera.

“The real tricky moment will come if the US expands the scope and enforces secondary sanctions, which will become a tug-of-war between China’s support for Russia versus whether the West is willing to pressure or put secondary sanctions on China given its large role in global trade.”

Ng said the pressure campaign could prompt ostracised countries to seek to “reduce dollar dependency and establish more cross-border payment systems”.

“This can hurt the effectiveness of sanctions over time, but a complete replacement of the dollar remains very unlikely,” he said.

There will be banks that handles transaction with Russia, Iran, N.Korea and other sanctions states, and there will be banks that do business with the west. The two will be separate to minimize impact of any sanction. China has been doing this for years.

 

[Hamartia Antidote]

There will be banks that handles transaction with Russia, Iran, N.Korea and other sanctions states, and there will be banks that do business with the west. The two will be separate to minimize impact of any sanction. China has been doing this for years.

Of course. I'm quite sure Russia (and everybody else) is well versed at making deals outside the scrutiny of the banking system.

 

[Zsari]

Of course. I'm quite sure Russia (and everybody else) is well versed at shady deals outside the scrutiny of the banking system.

Nothing shady. As long as the banks doing business with Russia has no business with the west, and vice versa, then it is perfectly legal.

 

[Han Patriot]

Of course. I'm quite sure Russia (and everybody else) is well versed at shady deals outside the scrutiny of the banking system.

For gods sake, RUSSIA IS NOT CUT OFF FROM Swift, some banks are but others are still there. They still need to buy Russian oil. I don't understand why ppl are so naive, its just a gimmick to show that the Western establishment is punishing Russia. The fact is they can't cut Russia off.

 

[Titanium100]

Classic @Hamartia Antidote Thread divide and rule tactics on full display

 

[Hamartia Antidote]

Classic @Hamartia Antidote Thread divide and rule tactics on full display

Aljazeera....blame the Middle East Muslim press I guess...you know a thing or two about that area of the world.

 

[Titanium100]

Aljazeera....blame the Muslim press I guess.

That is K.O comeback.. All tho I hate Aljazeera to be honest...

 

[K_Bin_W]

Now don't be breaking my heart, I only have got a problem with the fascist Modi and also as soon as IOK is returned to the Pakistan, will have a cup of tea and samosa in the Delhi market. My colleagues keeps on telling me its going to be a long wait but am a patient man, at the mean time they keep on getting me Haldi Ram sweets to get their promotions. Am a reasonable man easy to please, just vote out this Hindu terrorist so we can sit down across the table for the IOK return date to the Pakistan.
India is a supa power, QUAD member, UNSC member at the moment, US strategic partner and list is endless. Beaten China in the Galwan valley in the arm wrestling, done a surgical strike not long ago at the Pakistan soil killing a poor crow, so we all care..

ROTFL LMAO...

 

[gambit]

For gods sake, RUSSIA IS NOT CUT OFF FROM Swift, some banks are but others are still there. They still need to buy Russian oil. I don't understand why ppl are so naive, its just a gimmick to show that the Western establishment is punishing Russia. The fact is they can't cut Russia off.

Yes, Russia is removed from SWIFT. The position is Russia is out with individual exceptions for some banks to cater to certain countries unique needs. It is neither gimmick nor semantics. As time goes by and as countries complete their process to compensate for whatever current business with Russia are done, those previously allowed banks will be removed. Those banks know their coming fates. So essentially, yes, Russia is removed from SWIFT. And your China will refuse to help Russia. But there is a coming fortune for China in that over the long run, Russia will become China's b!tch, a reversal of fortune from the Cold War yrs. So you can stop defending Russia.