China Profiting From Russia's Financial Woes: CNN
In the four weeks that Russia has been attacking Ukraine, spurring almost unanimous global condemnation, one superpower has been notably muted. And it’s become perhaps the biggest wild card that could determine the fate of the war, Allison Morrow reported for CNN Nightcap.
Photo Insert: Beijing-based Asian Infrastructure Investment Bank (AIIB) followed the World Bank (WB) lead in halting all of its activities related to Russia and Belarus.
With Russia's economy collapsing, China's willingness to help Russia appears to be limited, which means it is not ready to stick its neck out for the benefit of President Vladimir Putin, whose China-made military vehicles have been lost in Ukraine, their tires busted by sub-zero temperatures and their hulls burned by better-made Ukrainian rocket-propelled grenades.
"China is not a party to the [Ukraine] crisis, and doesn't want the sanctions to affect China," Foreign Minister Wang Yi said this week. Worse, China has allowed the Russian currency to fall faster relative to the yuan, making Russian oil and gas cheaper.
Sanctions have frozen about $315 billion worth of Russia's foreign currency reserves. But China’s central bank so far hasn’t made any moves to let Russia access the $90 billion it holds in yuan.
If China allowed Moscow to convert its yuan reserves into US dollars or euros, "that would clearly help Russia's current impasse," wrote Alicia García-Herrero, chief economist for Asia Pacific at Natixis, in a research report on Tuesday. But the Chinese central bank is unlikely to take the reputational risk of potentially breaching Western sanctions.
Boeing and Airbus are no longer able to supply spare parts or provide maintenance support for Russian airlines. The same is true of jet engine makers. That means Russian airlines could run out of parts within a matter of weeks. An irate Russian aviation official said Moscow is asking Turkey and India for help with spare parts after China refused to send help.
Another indication that China is not being faithful to the vow for unlimited partnership with Russia is that the Beijing-based Asian Infrastructure Investment Bank (AIIB) followed the World Bank (WB) lead in halting all of its activities related to Russia and Belarus.
That means $1.1 billion of approved or proposed lending aimed at improving road and rail networks is now on hold at a time when the Belt and Road Initiative (BRI) is heading to the doghouse.