Russian nuclear forces hold maneuver exercises – report
BEIJING (Reuters) – China’s support for Russia through oil and gas purchases is angering Washington and raising the risk of U.S. retaliation, foreign observers say, though they see no signs that Beijing is helping Moscow to escape sanctions for its war against Ukraine.
Beijing’s importance as a lifeline for Russian President Vladimir Putin rose on Monday after the 27-nation European Union, the main fossil fuel market that provides most of Moscow’s foreign income, agreed to stop oil purchases.
President Xi Jinping’s government said ahead of the Feb. 24 Russian attack that it had an “unlimited” friendship with Moscow and left the West guessing whether it could bail out Putin.
China rejects the sanctions as illegal because the United States, Europe and Japan have cut Russia off from their markets and the global banking system without going through the United Nations, where Beijing and Moscow have veto power.
The sanctions do not prohibit China, India or other countries from buying Russian oil and gas. But President Joe Biden has warned Xi of unspecified consequences if Beijing helps Moscow evade sanctions. This leaves open the risk that Chinese companies will be punished by losing access to valuable Western markets.
Beijing seems to comply. But state-owned companies are buying more Russian oil and gas, earning the Kremlin export revenue. They are also potential investors in Russian energy projects as Western companies leave.
“The Biden administration will likely become increasingly exasperated with China’s continued support for Russia,” Eurasia Group’s Neil Thomas said in an email.
This increases the likelihood of “unilateral action to punish Beijing” and “allied coordination on economic security measures aimed at countering China,” Thomas said.
The dispute adds to tension with Washington over Taiwan, Hong Kong, human rights, trade, technology and Beijing’s strategic ambitions.
China represents “the most serious long-term challenge to the international order,” Secretary of State Antony Blinken said in a May 26 speech.
Xi’s government has tried to distance itself from Putin’s war by calling for peace talks, but it avoids criticizing Moscow.
Other governments “must not harm China’s legitimate interests in any way” in their relations with Ukraine, Foreign Ministry spokesman Zhao Lijian warned.
Monday’s decision by European leaders will cut Russian oil imports by 90%, according to its chief executive, Ursula von der Leyen. European customers paid Russia up to $1 billion a day for oil, gas and coal.
Mikhail Ulyanov, permanent representative of Russia to international organizations in Vienna, replied on Twitter: “Russia will find other importers”.
Moscow is tiny as Beijing’s trading partner, but an ally against what both feel is US dominance in global affairs.
China sees Russian oil and gas as a way to diversify supplies for its energy-hungry economy. China bought 20% of Russian crude exports last year, according to the International Energy Agency. The two sides announced a new 30-year gas contract on February 4, three weeks before Moscow’s attack on Ukraine, which the state-run Global Times newspaper said will boost China’s annual supply of gas. about 25%.
While the two are friends, China is taking advantage of the situation to secure cheaper energy and favorable trade deals, said Maria Shagina of the International Institute for Strategic Studies.
“They would always take advantage of Russia’s isolation,” Shagina said. “But they would be very careful not to violate the sanctions outright.”
On May 24, as Biden traveled to Tokyo, Russian and Chinese warplanes conducted “strategic air patrols” over the Sea of Japan, East China Sea and Western Pacific. The Japanese government said bombers flew near Japan.
Biden warned Xi in a video meeting on March 18 not to provide military or economic aid to Moscow.
Biden’s national security adviser, Jake Sullivan, said in March that Washington would not tolerate China or any other country helping Moscow circumvent sanctions. The White House has criticized Beijing’s “rhetorical support” for Putin.
Washington is “closely monitoring” Chinese relations with Moscow, the US embassy said in a written response to questions.
“We haven’t seen the supply of military equipment,” he said. Asked about economic sanctions and possible violations, the embassy said it had nothing else.
After BP and ExxonMobil announced they were pulling out of Russian oil and gas projects, “there are rumors that Chinese state-owned companies may step in and acquire stakes,” Shagina said.
Chinese imports from Russia rose 56.6% year on year in April to $8.9 billion, according to customs data. That helped Putin’s government post a current account surplus, the broadest measure of trade, of $96 billion for the four months ending in April.
Washington is also frustrated that India, the world’s third-largest oil importer, is buying more from Russia to take advantage of low prices. The Biden administration is pressuring Prime Minister Narendra Modi’s government to quit.
In March, the US government told its Asian and European allies that US intelligence had determined that China had indicated to Russia that it would be willing to provide military support for the Ukraine campaign and financial assistance for limit the impact of sanctions.
Russia has been kicked out of the global SWIFT network for bank transfers.
Chinese credit card processor UnionPay refused to work with Russian banks after Visa and MasterCard stopped serving them, Russian news outlet RBC reported in April. He said UnionPay feared being hit with “secondary sanctions” and cut off from the Western-controlled global financial system.
China has given Moscow an economic lifeline following Western sanctions imposed over its 2014 capture of Crimea by Ukraine.
Beijing has agreed to buy Russian gas in an estimated $400 billion deal over three decades. Moscow turned to Chinese state-owned companies to help pay for oil and gas development after Crimean-related sanctions cut off Western funding.
“Help will never be free,” Shagina said.