Russia and China cemented economic ties ahead of Ukraine invasion
“If they don’t comply with the United States, they have problems with the United States, but if they don’t comply with China, they could also face sanctions in China,” he said. -he declares.
Of course, collecting fines from companies that are unwilling to pay and monitoring whether companies are following the rules could be difficult, Chorzempa added. “It is already proving difficult to monitor things that are already monitored, and if you expand this list, it will be a real challenge to check what is happening in Russia,” he said.
The Russian attack on Ukraine and the global economy
Growing concern. Russia’s attack on Ukraine could cause skyrocketing energy and food prices and could scare off investors. The economic damage caused by supply disruptions and economic sanctions would be severe in some countries and industries and go unnoticed in others.
The Biden administration’s export controls apply to goods produced in any country as long as they use American technology – including chipmakers like Taiwan Semiconductor Manufacturing Company and the Semiconductor Manufacturing Industry Corporation based in Shanghai.
Both companies continue to rely on the United States for certain components and manufacturing technologies, said Gabriel Wildau, chief executive of Teneo, a consulting firm. If they continue to supply Russia, SMIC and other Chinese companies could be cut off from American technology, the same kind of sanction that has crippled Huawei. On Friday, Taiwan Semiconductor said it was committed to complying with export controls.
“If Beijing is seen as Moscow’s enabler, pressure will increase in the US Congress to extend these restrictions,” Wildau wrote in a note to clients. Beijing would also face the risk of other big tech exporters, such as Japan, South Korea and the Netherlands, “taking Washington’s harder line”, he said.
China’s state-owned banks could also face risks to continue lending to Russia. China and Russia settled more of their trade using the renminbi and rouble. Beijing is also trying to develop the digital use of its currency as an alternative to the dollar, which could help Russia limit the effect of financial sanctions.
But Chinese banks are still deeply dependent on the US dollar. While China’s big banks already appeared to be withdrawing funding from Russia, Wildau said, Beijing could choose to support Russia by using smaller state-owned banks that don’t do a lot of international business that requires the use of the dollar. .