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Chinese companies hit by US, EU sanctions on Russia

27 Feb 2024 - {{hitsCtrl.values.hits}}      

London - U.S. and European Union sanctions announced Friday on hundreds of people and companies for supporting Russia's war in Ukraine included several companies from China.

While most sanctions were against Russians and Russian firms, the U.S. and EU measures also included Chinese individuals and companies based in mainland China cities as well as Hong Kong for supplying the Russian military.

The U.S. sanctions also targeted individuals and firms based in Kazakhstan, Liechtenstein, Turkey and the United Arab Emirates, while the EU also targeted individuals and entities based in India, Kazakhstan, Serbia, Sri Lanka and Turkey.

They also included sanctions against Russian prison officials over the suspicious death last week in a Russian prison of opposition leader Alexey Navalny.

Russia's foreign ministry denounced the sanctions as "illegal" and said it would respond by banning some EU citizens who provided military assistance to Ukraine from entering Russia.

Chinese officials did not issue an immediate response to the sanctions. But, at a regular briefing Tuesday, China's foreign ministry spokesperson Mao Ning commented on the expected sanctions saying China follows an "objective and impartial position on the Ukraine crisis" and has "worked actively to promote peace talks."

She said they "have not sat idly by, still less exploited the situation for selfish gains."

Ukrainian officials and media reports have accused Chinese companies of supplying key electronics and dual-use technologies, including drone components, to Russia's military since its invasion of Ukraine two years ago, which Beijing has denied.

European Commission President Ursula von der Leyen on Wednesday preempted Friday's official announcement on social media, saying, 'I welcome the agreement on our 13th sanctions package against Russia. We must keep degrading Putin's war machine. With 2000 listings in total, we keep the pressure high on the Kremlin. We are also further cutting Russia's access to drones.'

The sanctioned individuals and companies are banned from doing business with U.S. or European firms.

But legal and political analysts disagree on the effectiveness of the sanctions.

Lawyer Mark Handley, a partner at the Philadelphia-headquartered law firm Duane Morris LLP, said being sanctioned will certainly affect their international business. "Things like international insurance companies or shipping could get very complicated once they are on the sanctions list.'

However, Pieter Cleppe, editor-in-chief for BrusselsReport.eu, told VOA, 'Historical research has shown that sanctions mostly fail, especially when prolonged, as is the case with Russia. The targeted country learns to cope with them."

He said, "While sanctions may impoverish ordinary Russians, they have failed to halt the Russian offensive, which should be the goal.'

The Yermak-McFaul International Working Group on Russian Sanctions and the Ukrainian think tank KSE Institute in January published a report showing sanctioned technology has still been reaching Russia's military through third country intermediaries, which the EU and the U.S. hope the fresh measures will stop.

Despite the historic sanctions, Russia's economy has been resilient as it shifted from European trade to doing more business and selling more oil to Moscow-friendly nations such as India, Brazil and China.

Junhua Zhang, senior assistant researcher at the Brussels-based European Institute for Asian Studies, said the EU's highest expectation "is for China to align with the EU in resisting Russia's aggression, which is unrealistic. The EU's minimum expectation is for Chinese companies not to work for Russia, but strictly speaking, only fools would have such an expectation."

"Just consider, [Chinese President] Xi Jinping sees Putin as his best friend, and those below him will act accordingly, a point that Europeans also recognize.'

Others argue that sanctions on Chinese firms could push Beijing to reconsider.

Aliona Hlivco, a former Ukrainian lawmaker and managing director at the London-based think tank the Henry Jackson Society, said sanctions against Chinese companies could prove useful in deterring Russia's war on Ukraine. 'China is currently attempting to improve relations with the West, so reinforcing China's compliance with international norms could be opportune.'

The EU is China's second-largest trading bloc partner after the Association of Southeast Asian Nations.

China Customs says China-EU bilateral trade value was $783 billion in 2023, a year-on-year decrease of 7.6%.

In the same year, while Russia lost most of its European market due to sanctions, the bilateral trade between China and Russia hit a record high of $240 billion, a year-on-year increase of 26.3%.

Trade between the U.S. and China in 2023 fell for the first time since 2019, by 11% to $664 billion, according to customs data, and the Commerce Department says the United States imported more goods from Mexico than China for the first time in 20 years.