Why China Won’t Help Russia Around Sanctions
Exports are the saving grace for a country struggling with a slowing economy. Beijing doesn’t want to alienate its two largest trading partners.
TOPSHOT - Russian President Vladimir Putin (L) and Chinese President Xi Jinping in Beijing, on February 4, 2022.
Photographer: ALEXEI DRUZHININ/AFPChina is the wild card. President Xi Jinping has vowed that the friendship between China and Russia has “no limits,” and he certainly has the tools to help soften the blow of unprecedented sanctions imposed by the U.S. and European Union on Vladimir Putin’s wartime economy.
Beijing could buy some of Russia’s $130 billion hoard of gold held by the Russian central bank and pay for it in U.S. dollars. It could reactivate a currency swap line, which was established after Russia’s annexation of Crimea in 2014, and serve as the lender of the last resort. It could also step up trade with Russia, buying more oil, natural gas, wheat and fertilizers. Even better, China could buy stakes in Russian energy and commodities companies — although such deliberations are at an early stage, according to Bloomberg News. Plus, China has a long history of working around U.S. sanctions. In the past, it has used small, systemically unimportant banks to do business with Iran.