Radio Free Europe / Radio Liberty @RFERL
"China has been very quietly enforcing U.S. sanctions," former U.S. Treasury official @PeterPiatetsky tells @ReidStan
www.rferl.org/a/china-rescue-russia-economy/31737915.html
Why China Won't Rescue Russia's Flailing Economy
The Asian Infrastructure Investment Bank (AIIB), a Chinese-led development bank, suspended all business with Russia and Belarus on March 3, a possible sign of the limits to Beijing and Moscow's relationship. Similarly, the Shanghai-based New Development Bank also suspended business with Russia the same day.
And
According to a Reuters report, Russian firms are also rushing to open Chinese bank accounts in hopes of circumventing the worst economic pain brought by sanctions, while the Financial Times reported on March 4 that investors are increasingly betting on Beijing boosting trade with Russia to soften the blow from sanctions.
And
RFE/RL: What role could China play in supporting Russia's economy? We have seen some headlines about oil and wheat and there has been a push in recent years to sign deals in Chinese yuan, leaving them outside the U.S.-dollar-based international financial system. What options are on the table for Beijing?
Peter Piatetsky: Beijing has all the cards here and it's a very bad situation for Russia because Russia is a net exporter, but it doesn't have that many different exports minerals, diamonds, [uranium, wheat], but primarily oil and Europe is its main destination for oil.
China could buy up that extra oil, but it does not seem to be willing to and Russia's main external trading relationship is with China. However, China's main external trading relationship is with the United States. So what we've seen so far is that China has been very quietly enforcing U.S. sanctions.
A very good example we can look at is [sanctions] against North Korea and Iran. China essentially designated certain banks that aren't [integral] to the economy that can work with Iran and North Korea, and if they get sanctioned then that's an [acceptable] loss, but they're trying to not expose the broader [Chinese] economy.
China can essentially do one thing here, which is to buy more Russian goods, but they don't seem to be willing to do that and Russia doesn't have that many different goods that China is willing to buy.
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RFE/RL: How do you see the economic hit from Russia affecting the wider region, especially across Central Asia and the Caucasus, which have deep ties to Russia's economy?
Piatetsky: For Central Asia, this is an absolute disaster, a lot of those economies are heavily remittance-dependent and with Russians losing money and Russians losing jobs, there are going to be less jobs all around.
There's not going to be any protection for Central Asian migrants that are losing jobs, many of [which] are unofficial. So, you're going to see Russians losing jobs [and] Central Asians will lose those jobs much quicker so will Georgians and the remittances that they were sending back to their home countries will also fall.
The article goes on to explain theres little benefit to China to bail out Russia, but it has huge opportunities in stepping into the economic and political vacuum that this creates in central asia.
The article pretty much says that Putin's only economic way out, is through ending the war.
We've already seen the 'leaked FSB letter' about total Russian economic collapse by June.
This doesn't seem to offer an alternate exit route at all.