China discusses steps to protect assets from US sanctions, stops Union Payaid to Russia

The fear of secondary sanctions appears to have compelled China to review its “ no limits”
friendship with Russia and end UnionPay’s cooperation with Russian banks and space ties
with Russia. These developments are likely to have an impact on Sino-Russia relations at a
time when Russia has been looking at China as trusted ally. China chose to break the trust to
protect its own interests.
Chinese regulators recently convened an emergency meeting with domestic and foreign banks
to discuss how they could protect the country’s overseas assets from US-led sanctions similar
to those imposed on Russia for its invasion of Ukraine. President Xi Jinping’s administration
has so far maintained staunch support for Vladimir Putin throughout its invasion of Ukraine,
but Chinese banks and companies have been wary of transacting any business with Russian
entities that could trigger US sanctions.
In March, Russia’s leading banks had begun looking into issuing cards that operate on a
Chinese payment system after Visa and Mastercard said they would cut their services in
Russia over the invasion of Ukraine. In less than two months, Beijing broke the trust and
ended UnionPay’s cooperation with Russian banks.
China’s decision to cooperate with the West at the cost of its relationship with Russiaindicated
that China was losing patience with regard to on-going conflict between Russia and Ukraine
thatis unlikely to end in near future. Realising that the ongoing conflict would badly hit its
economic interestsdue to sanctions, the Xi Jinping administration decided to end UnionPay’s
cooperation with Russian banks and end space ties with Russia. Because the administration
did not want secondary sanctions to financially hit the sagging Chinese economy .
Visa and Master card had suspended their operations in Russia after Vladimir Putin launched
an invasion of Ukraine on February 24. Several Russian banks planned to issue China’s
UnionPay cards as an alternative to the Western payment networks. But China’s UnionPayhas
refused to cooperate with Russia’s biggest lender Sberbank and has also suspended talks with
other banks due to fears of secondary sanctions. According to available information, “The
project [to issue UnionPay cards] is temporarily on hold. There has been no official
confirmation because it’s tied to sanctions. UnionPay has also suspended negotiations with
other sanctioned banks in Russia, including the country’s largest private lender Alfa-Bank,
VTB, and Otkrytie. Reports from Moscow stated that In fact, Russian users of UnionPay have
also reported difficulties with using the network system to make payments in the US, Israel,
Europe, Asia, and the Middle East.
The decision to end cooperation with Russian banks by Chinese bank is in sharp contrast to
the most famous “no -limits” friendship between China and Russia. The proclamation had
immediately preceded Putin’s war in Ukraine.
Experts said that the fear of impact of Western sanctions has compelled China to review its
decision to support Russia. Despite all tensions, China and the West do have strong trade ties.
This is what has made China an export powerhouse and it doesn’t want to lose that tag,
explained experts.
China has faced criticism from the country’s largest markets, the U.S. and European Union,
for refusing to condemn Russia’s invasion of Ukraine. Xi support for Russian President
Vladimir Putin’s justification for attacking his neighbour has fuelled fears of foreign
sanctions and an accelerated decoupling from the West.
Realising that the financial burden for offering support to Russia for invading Ukraine would
adversely affect Chinese economy, China has decided to protect its economic interest than
Russia’s invasion of Ukraine which seems a far distance dream at the moment.
Chinese President Xi Jinping called for a greater global economic integration, while warning
against decoupling by Western economies. He said that “any effort to build barriers and
decouple works against economic and market principles, and would only harm others without
benefiting oneself.” His message was absolutely clear. China doesn’t want to decouple from
the West. It wants to remain integrated with the US and its allies, which is why it also seems
to be ending cooperation with Russia.
President of the Russian Academy of Sciences Academician Alexander Sergeyev, who
admitted that the Western Academies of Sciences had frozen scientific contracts with Russia,
and in cooperation with There is a pause in China. Speaking at the international scientific and
practical conference “Digital International Relations 2022” in Moscow few days ago, He said
that China has refused to work with the Russian Academy of Sciences. “Our Chinese
scientific colleagues have also paused. Over the past month, we have not been able to enter
into serious discussions of the situation with them, despite the fact that we really have built
excellent cooperation”, – Alexander Sergeyev emphasized.
China’s decision to suspend scientific cooperation with Russia was on expected lines.
However, he also said that interaction with Chinese scientists became more complicated.
China and Russia had started collaborating in the space sector in recent years. This seemed
to pose a challenge for the West given Russia’s status as a space superpower and China’s
budding space research industry.
It is time for Russia to realise that China was no longer a dependable ally.