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Will China Respond to Russia’s request for Help against sanctions, amid US warning

Two days after national security adviser Jake Sullivan warned his Chinese counterpart of serious consequences if Beijing helped Russia fight Ukraine, what could still be hidden.

“We will have this discussion directly with the Chinese and Chinese leadership, not with the media,” White House press secretary Jen Psaki told reporters Tuesday.

Psaki said Sullivan was “very positive about the results” at his Monday meeting in Rome with China’s top foreign policy chief Yang Jiechi.

“But in terms of any potential impacts or consequences, we will guide those through the private channels in the meantime,” Psaki said.

With Russia’s invasion of Ukraine approaching its fourth week, concerns over how Western allies will react if China or Chinese companies try to help Moscow avoid sanctions imposed by the US, UK, Europe and Japan have added a new level of uncertainty to global markets. due to the collapse of the Russian economy.

That uncertainty is compounded by a new memory of what happened last time the White House issued vague warnings about the consequences, at the time leading to the Russian invasion.

On February 20, four days before Russian troops marched on Ukraine, Psaki issued a statement saying the US was “ready to impose quick and difficult results” if Russia made its plans clear.

At the time, a few analysts believed that the United States and Europe could actually reach an agreement on tougher sanctions under consideration – such as freezing Russian bank reserves. But they did so, capturing both Moscow and Wall Street.

When it comes to China, no one wants to make the same mistake again.

Moscow has reportedly asked Beijing for military and economic assistance to fight Ukraine, although both governments have publicly denied it.

But China has little interest in engaging in an economic war between Moscow and other developed countries.

“China is not involved in the crisis, and does not want sanctions to affect China,” Foreign Minister Wang Yi said in a telephone call on Monday with Spanish Foreign Minister Jose Manuel Albares.

However, Wang emphasized that “China has the right to the protection of the moral and material interests resulting from any scientific, literary or artistic production of which he is the author.

Over the past week, it has become clear that the Kremlin views Beijing as a way of economic life.

Russian Finance Minister Anton Siluanov said on Sunday “his country’s economic cooperation with China will still allow us to maintain the cooperation we have achieved …

This “growing” cooperation from China could take many different forms. Some of them will seriously violate sanctions against Russia, resulting in spontaneous replies from the US But experts say some of the measures Beijing may take are technically legal, forcing the US to rely heavily on soft tactics.

Violations of strict laws may include helping Russia to circumvent U.S. export controls. in high-tech goods by buying American products and selling them in Moscow.

That move could be very dangerous for businesses, however. The sanctions are designed to apply not only to American companies, but to any company in the world that uses U.S. software. or parts, which include many in China.

Trade Secretary Gina Raimondo recently explained what could be the consequences for China’s largest semiconductor company, if the US learns that it sells chips to Russia by violating US export controls.

“We could actually shut down [the company], because we are preventing them from using our equipment and software,” Raimondo said in an interview with the New York Times on March 8.

Raimondo’s example highlights how the US can use its economic power to make any company decision to help Russia avoid sanctions that are, in fact, deadly.

“Most of the major institutions in China are unwilling to risk American sanctions, so any sanctions may be imposed by smaller institutions that may lose less,” said Martin Chorzempa, a researcher at Peterson. Institute for International Economics.

“Overall, China looks set to complain but is compliant,” he told the Washington Post.

Another way of cooperation between Russia and China would be for Beijing to buy cheap Russian oil and gas, Alexander Gabuev, a major partner and chairman of Russia’s think tank Carnegie Moscow Center, told CNBC “Capital Connection” on Monday.

“There will be no official violation of US and EU sanctions, but that will be a significant help to the state” in Russia, “Gabuev said.

That kind of Sino-Russian cooperation requires a different response from the United States, working with European partners to emphasize the long-term threat to China’s image in the world.

″ [Russian President] Vladimir Putin.

“Russia, Cuba, North Korea, Venezuela, Iran – this is not the international club most Chinese people aspire to be a part of,” Daly told CNBC’s “Squawk Box Asia” on Tuesday.

As the plight of Ukrainian citizens increases and television stations around the world broadcast footage of bombed shelters and brave Ukrainian warriors, “the situation is pushing China forward that way,” Daly said.

But that does not mean that the country will part with its long-term counterpart. Instead, Beijing could be expected to “become religious by looking at” US and EU sanctions but would “do everything possible” to help Moscow, Gabuev said.

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