[Jimbuna]

China drops Russia to salvage economy as US threatens 'most serious challenge' to trade

China's has suffered a major blow after exports to Russia plunged in March, the first time data showed a decrease year-on-year since the start of the war in Ukraine.

The drop came as Chinese businesses sought to avoid the impact of the secondary sanctions Joe Biden's administration introduced to cripple industries deemed to be helping Russia perpetuate its war efforts.

China has slowly become a pivotal lifeline to Moscow after international business started moving out of Russia in the aftermath of the invasion of Ukraine in February 2022.

The two nations have been strengthening their alliance, with Xi Jinping and Vladimir Putin exchanging visits to their respective capitals over the past year to reiterate their commitment to their partnership.

Trade between Russia and China hit record highs in 2023, with Russian oil imports and Chinese cars. Machinery and electronic exports driving the $240 billion surge.

But the latest data from the General Administration of Customs China (GACC) showed a 15.7 percent drop in trade compared to March 2023.

Last week, the United States last week warned "full sanctions" were on the table for any Chinese business deemed to be providing Russia material and expertise needed to sustain the conflict in Ukraine.

Chinese banks have increasingly restricted Chinese yuan payments to Russian traders, a considerable blow to Moscow which has been relying on the currency to continue trading.

Political analyst Chris Weafer told Newsweek: "The threat of US secondary sanctions is the most serious challenge to bilateral trade since sanctions started and is a direct threat to Russia's economic stability if not addressed within months.

"The political and strategic relationship between Russia and China is too important for both governments not to find a workaround."

During her visit to China last month, US Treasury Secretary Janet Yellen warned Beijing businesses would face "significant consequences" if they were found to be helping Russia's war effort.

And Secretary of State Antony Blinken is set to renew the warning during his upcoming visit to the Chinese capital later this month.

The mere fact that Blinken is making the trip might be seen by some as encouraging, but ties between Washington and Beijing are tense and the rifts are growing wider.

From Russia and Ukraine to Israel, Iran and the broader Middle East as well as Indo-Pacific and trade issues, the US and China are on a series of collision courses that have sparked fears about military and strategic security as well as international economic stability.

Blinken "will raise clearly and candidly our concerns" during the talks starting Wednesday, a senior State Department official said.
https://www.msn.com/en-gb/news/world...4e690efd&ei=26