Beijing on Wednesday gave its full support to the comments made by the Chinese ambassador to Ukraine earlier this week. “China will never attack Ukraine. We will help, especially economically,” Fan Xiang was quoted as saying in a statement from the Lviv regional government.
Fears that Chinese companies could face US sanctions over ties with Russia led to a sell-off in Chinese stocks. Recent days. The downturn was reversed on Wednesday when Beijing promised to pursue policies to boost its economy and keep financial markets stable.
Beijing and Moscow share a strategic interest in challenging the West. However, Chinese banks cannot afford to lose access to US dollars and cannot be bought by many Chinese industries American technology must be lost.
Although China is Russia’s No. 1 trading partner, Beijing has other priorities. Trade between the two countries accounts for just 2% of China’s total trade. According to Chinese customs figures last year, the European Union and the United States held the largest stakes.
Here are some of the steps Beijing has taken over the past few weeks to distance itself From Isolated and Collapses Russian economy.
Letting the ruble drop
The yuan, China’s currency, does not trade completely freely, but instead moves into bands set up by officials of the People’s Bank of China (PBOC). Last week, they doubled the size of the ruble trading limit, allowing the Russian currency to fall sharply.
The ruble has already lost more than 20% Its value against both the dollar and the euro since the start of the war in Ukraine. By allowing the Russian currency to fall against the yuan, Beijing did nothing to help Moscow.
Sitting in reserves
Alicia Garcia-Herrero, chief economist for the Asia-Pacific region at Natixis, wrote in a research report on Tuesday that China’s $ 90 billion in reserves in Moscow’s yuan is the most important aid China can provide.
About $ 315 billion – or half of the total – of Russia’s reserves have been frozen as Western countries have banned Russia from dealing with the central bank.
The PBOC has not yet commented on its position on the reserves.
Garcia-Herrero noted that if China allowed Moscow to convert its yuan reserves into US dollars or euros, “it would clearly help Russia’s current stalemate.” However he acknowledged that their numbers were not enough to defeat PBOC’s reputation for violating Western sanctions.
“Long-term gains moving closer to Russia do not match the impact of the sudden loss of interest in China by Western investors,” he added.
Parking of aircraft parts
That is, Russian airlines may fly out of aircraft within a few weeks without frequent replacement of equipment or equipment recommended for safe operation.
Earlier this month, a top Russian official said that China had refused to send aircraft parts to Russia while Moscow was looking for alternatives.
Valery Gudinov, head of aviation qualification at Russia’s aviation agency, quoted Russia’s state news agency DOS as saying that Russia was looking for opportunities to acquire parts from China, including Turkey and India.
“As far as I know … China has refused,” Goodinov was quoted as saying.
In response to CNN’s request for comment, China’s Foreign Ministry reiterated its emphasis on Beijing. In opposition to the sanctions, China and Russia will maintain “normal economic and trade cooperation.”
Freeze Infrastructure Investment
The World Bank has suspended all its plans in Russia and Belarus following the invasion of Ukraine. It has not approved any new loans or investments to Russia since 2014 and nothing to Belarus since 2020.
It is even more surprising that the Beijing-based Asian Infrastructure Investment Bank has decided to do the same. In a statement earlier this month, it said all activities related to Russia and Belarus would be suspended “due to the outbreak of war in Ukraine.” It added that the move was in the “best interests” of the bank.
– Hannah Richie of CNN’s Beijing Bureau and Sydney contributed to this article.