The recent tensions between the US and Russia have caused Chinese banks to halt transactions with Russia, fearing repercussions in the international financial market. The US threatened sanctions on any foreign financial institution supporting Russian military suppliers, leading China to scale back its business with Russian parties. This move underscores Russia’s dependence on China, as Beijing takes advantage of Moscow’s vulnerabilities by purchasing cheap commodities like oil.
Although China avoids direct military support for Russia, it maintains a delicate balance between the US and Russia. The sanctions have hindered Chinese banks from trading with the Moscow Exchange, impacting Russia’s economy. Despite these challenges, Russian and Chinese businesses will likely find ways to work around the sanctions.
The situation highlights the limitations of the Russia-China relationship, as the partnership faces strains amid the war in Ukraine. While China remains cautious not to upset its relationship with the US, the impacts of the sanctions hint at broader implications for global markets. The evolving dynamics between Beijing, Moscow, and Washington will shape the future of international trade and geopolitics.
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