Reduce Russia's assistance: why Chinese banks appeared in the EU sanctions package

The EU explained that banks were engaged in cryptocurrency operations that undermined the efficiency of sanctions. Focus examined what effect it will have and whether partners will continue to strengthen sanctions to the PRC structures, known for "friendship" from the Russian Federation.

The statement of the head of the Central Committee of the CCP in foreign affairs and the Ministry of Foreign Affairs van that "China cannot allow Russia in the war" could be the impetus for sanctioning of the PRC banks, notes in the conversation with focus Mikhail Gonchar, President of the Center of Globalism. “In Brussels, they knew well that China was helping Russia. Yes, it does not supply military equipment, but supplies the components needed by the Russian MIC.

Therefore, Brussels's bowl was exhausted, and they made such a very timid little step, a hint. Previously, why not measures were introduced? This is a matter of bilateral trade. Both the PRC and the EU are the great commercial monsters, they are interested in each other, ”Michael Gonchar explained. He added that the European Union does not want its borders with Russia in the event of defeat of Ukraine, while China clearly stated that he was supporting Russia.

Hence the EU reaction and Chinese banks in a new sanction package. The expert believes that the European Union has the opportunity to curb the active cooperation of China with Russia, however, says Mikhail Gonchar, Europeans will do it in their inherent inherent manner. “Europeans will be very careful. That is, they now sent China to such a message.

China favorable trade with Russia, because it is profitable to squeeze the maximum discounts out of the Russians, get cheap raw materials, and to sell the Russians more expensive. But Europe for China is more significant in terms of market volume, and in terms of what China himself can take from there.  It is dangerous for China if Europe starts limiting Chinese high -tech companies. I think that the EU and China's further relations will be ahead.

Europe will set its line in China or reformat it, given that China is increasingly frankly on Russia's side, ”says Mikhail Gonchar. Russia is indeed an important partner of the Russian Federation, and the volume of bilateral trade between China and Russia in 2024 reached 1. 74 trillion yuan ($ 237 billion). However, the European Union is more important for the PRC, since last year the EU countries exported to China goods worth 213. 3 billion euros and imported by 517. 8 billion euros.

Similarly, China is important for Europe: last year, China was the largest EU trading partner in terms of import (21. 3% of all deliveries from outside the EU) and the third largest export (8. 3%). This is confirmed by the fact that disputes between the EU and the PRC can spoil trade relations, which is unprofitable for anyone - neither China nor the European Union. That is why sanctions against Chinese banks and companies in the EU have been postponed in a long box for a long time.

According to Vitaliy Shapran, economist, ex-member of the NBU Council, China makes business in the war, which Hungary, Slovakia, India and other countries that are not part of the Great Seven. “In addition, the PRC authorities do not control hundreds of thousands of private manufacturers of chips, plastic, chemicals, etc. Therefore, sanctions that will complicate the payments with the PRC will have a negative impact on foreign trade between the PRC and the Russian Federation.

Chinese banks have react well to US and EU sanctions, and since 2022 there are examples of contract stopping in the grain supply segment from the Russian Federation because of sanctions risks, ”the expert says.

In his opinion, as the US dollar is weakened to the euro, the weak and Yuan, and therefore the PRC becomes a "merchant teal" for EU foreign policy, and the war in Ukraine is a good opportunity for Europe without trade duties and prohibitions to press on the PRC, where they realize: to do business in Ukraine is bad.

The war in Ukraine is a good opportunity for Europe without trading duties and prohibitions to click on the PRC Vitaliy Shapran stated that in most cases the PRC supports Russia in the war, that is, it is about the banal earning money "on the situation". And the more sanctions - the cheaper oil and gas are supplied from the Russian Federation to the PRC. "If the EU and the United States stop at such warning events, then their impact will be minimal," says Vitaliy Shapran.

According to Mikhail Gonchar, further EU sanctions against Chinese companies and banks are possible, but it is unlikely to be radical, which will seriously affect the turnover of the PRC and Russia. That is, effective measures that will significantly limit the supply from China to Russia microchips and important equipment required by the aggressor for the manufacture of shells, HRB, missiles and drones are not worth waiting. “Radical actions are unlikely to come.