Ukraine crisis: China walks ‘diplomatic tightrope’, but impact of sanctions on Russia seen as ‘limited’ for bilateral trade

China has called for restraint from all sides and opposed unilateral sanctions, while saying it will continue trade with both Russia and Ukraine

Analysts say China is likely to support Russia financially and through trade, though if the situation escalates Beijing may ‘rethink its position’

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How far China will support Russia during the Ukraine crisis is being closely watched by the international community. Photo: AFP

Published: 7:45pm, 25 Feb 2022Updated: 1:25pm, 9 Mar 2022

China will have to carefully balance economic support for Russia with its own interests given the likelihood of further sanctions on Moscow for its invasion of Ukraine, though experts say larger Chinese firms and the government are unlikely to risk rupturing relations completely with the West.

Washington has frozen Russian assets in the United States, sanctioned Russian banks and put hi-tech exports to the country on hold. The package of sanctions does not include cutting Russian access to the swift financial messaging system.

China has so far called for restraint from all sides and opposed unilateral sanctions, while saying it will continue trading with both Russia and Ukraine.

Amid the unfolding crisis, Beijing’s actions are being closely watched by the international community and global markets.

China will support Russia financially and through trade as much as any Western sanctions allow

Mark Williams

“China will support Russia financially and through trade as much as any Western sanctions allow,” said Capital Economics’ chief Asia economist Mark Williams.

“Small companies and banks may breach sanctions, but larger firms and the government won’t risk a further rupture in relations with the West.”

Michael Gasiorek, professor of economics at the University of Sussex, said some Russian trade will be redirected to China, which could be helped by Beijing potentially lowering tariffs.

“About 40 per cent of Russian exports go to the EU, and 44 per cent to Nato, and 36 per cent of Russian imports come from the EU. China accounts for about 22 per cent of Russian imports, and 13 per cent of exports,” he said.