China Russia: 4 ways China is quietly making life harder for Russia

Now, with Russia’s economy being slammed with sanctions from all over the world, there is growing evidence that China’s willingness and ability to aid its northern neighbor may be limited. Beijing has refused to condemn Russia’s attack on Ukraine but wants to avoid being impacted by the sanctions it has repeatedly denounced as an ineffective way of resolving the crisis.

“China is not a party to the [Ukraine] crisis, and doesn’t want the sanctions to affect China,” Foreign Minister Wang Yi said Tuesday during a phone call with his Spanish counterpart.

Fears that Chinese companies could face US sanctions over ties with Russia had contributed to an epic sell-off in Chinese stocks recent days. That slump was reversed Wednesday when Beijing promised it would pursue policies to boost its sputtering 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 many Chinese industries cannot afford to be deprived of US technology.

While China is Russia’s No. 1 trading partner, Beijing has other priorities. Trade between the two countries made up just 2% of China’s total trade volume. The European Union and the United States have much larger shares, according to Chinese customs statistics from last year.

Here are some measures Beijing has taken in the last few weeks to distance itself from the isolated and crumbling Russian economy.

Letting the ruble drop

China’s currency, the yuan, doesn’t trade completely freely, moving instead within bands set by officials at the People’s Bank of China (PBOC). Last week, they doubled the size of the ruble trading range, allowing the Russian currency to fall faster.

The ruble has already lost more than 20% of its value against both the dollar and euro since the start of the war in Ukraine. By allowing the Russian currency to fall against the yuan, Beijing isn’t doing Moscow any favors.