Chinese banks have started to cut ties with their Russian customers. The financial institutions do not want to fall under secondary US sanctions.
These Chinese businesses, particularly banking institutions, are heavily reliant on the world economy because they are a part of the globalized world. Banking institutions will be severely impacted if they get secondary sanctions for collaborating with Russia.
Chinese businesses will not be able to compete or even survive if they lose their Western markets. A similar issue has previously affected the oil industry and partly disrupted Russian oil exports, especially to India.
Sanctions by themselves are insufficient
However, it is crucial to realize that sanctions are unable to destroy Russia or completely devastate certain elements of the Russian economy. Their mission is distinct: they must raise the cost of any such activities while slowing down specific production processes in the country that is waging war.
The flow of Russian oil will not stop, but the profit margin will narrow. Some gaskets will convert Russian money and facilitate its entry into international markets, but at a higher price. These actions are draining Russia’s financial resources, which could have been used for the war effort.
Sanctions are not enough to win. Neither North Korea nor Iran have ever experienced a catastrophe or defeat as a result of sanctions. They are an essential component of conflict, but they are not enough on their own.
China’s support to Russia
Regarding the fundamentals of Sino-Russian relations, China solely has a pro-China stance; it is not neutral, but it tends to be on Moscow’s side in the current circumstances. Therefore, China’s partnership with Russia or any other nation is based solely on mutual gain.
China is behaving very cynically; Russia is an object of their goals, a chance to leverage Russia’s capabilities in a geopolitical game, and a source of cheap energy, goods, and raw resources.
On January 31, the military ministers of China and Russia held a video conference. Beijing, defying pressure from the West, pledged Moscow’s support in the “Ukrainian issue.”. That’s how China calls Russia’s war against Ukraine.
At a meeting with senior Ukrainian officials, the Chinese envoy made a threat to the diplomatic ties between the two nations. Over a dozen Chinese corporations being placed on Kyiv’s list of “International Sponsors of War” has displeased Beijing.