China, a close ally of Russia, said on Monday that it was opposed to illegal unilateral sanctions and will continue to carry out normal trade cooperation with Moscow, as the US, EU and their allies stepped up punitive measures against Russia, including the interbank messaging system SWIFT.
Asked about what some have described as the “financial nuclear option” at a regular press briefing in Beijing, Foreign Ministry spokesman Wang Wenbin said China opposes the use of sanctions to solve problems and is even more opposed to unilateral sanctions that have no basis in international law.
“China and Russia will continue to carry out normal trade cooperation in the spirit of mutual respect, equality and mutual benefit,” Wang said.
The US is joined by some European nations and Canada to remove certain Russian banks from SWIFT, the payment system used for most international financial transactions.
The move is “unprecedentedly severe,” but is unlikely to deal a fatal blow against Russia, not only because of the latter’s long preparation but also its hard-to-replace economic value to the West, particularly Europe, China’s state-run Global Times reported.
China has repeatedly expressed opposition to the use of economic sanctions.
On Monday, Wang said that it has long been proved that sanctions, far from solving problems, only create new ones, while warning the US against undermining China’s and others’ interests in dealing with the Ukraine situation.
“We also demand that the US side should not harm the legitimate rights and interests of China and other parties when handling the Ukraine issue and its relations with Russia,” Wang said at a press conference when asked whether Chinese companies such as Huawei and Xiaomi would comply with US sanctions on Russia and stop supplies to the country.
Experts cautioned China to carefully balance economic support for Russia with its own interests given the likelihood of further sanctions on Moscow for its invasion of Ukraine.
“China will support Russia financially and through trade as much as any Western sanctions allow,” Capital Economics’ chief Asia economist Mark Williams said.
“Small companies and banks may breach sanctions, but larger firms and the government won’t risk a further rupture in relations with the West,” he told Hong Kong based South China Morning Post.
Michael Gasiorek, professor of economics at the University of Sussex, said some Russian trade will be redirected to China, which could be helped by Beijing potentially lowering tariffs.
“About 40 per cent of Russian exports go to the EU, and 44 per cent to NATO, and 36 per cent of Russian imports come from the EU. China accounts for about 22 per cent of Russian imports, and 13 per cent of exports,” he said.
“A broader set of sanctions would no doubt have a substantial impact on the Russian economy. But of course this will hit the population at large as opposed to targeted companies or individuals,” he told the Post.
