China helps Russia evade sanctions and likely most supplies tech used in Ukraine, U.S. report says
In an insightful report released by the Office of the Director of National Intelligence (ODNI) on July 27, 2023, it is revealed that China plays a significant role in supporting Russia's military efforts in the Ukraine conflict. This assistance comes in the form of economic aid, technological supplies, and evasion of Western sanctions. The report underscores China's expanded purchase of Russian energy exports, including oil and gas, since the invasion of Ukraine in February of the previous year. China's financial system has been instrumental in enabling Russia to conduct transactions without Western interference.
The relationship between China and Russia has evolved into a crucial economic partnership. The ODNI report, mandated by Congress, highlights Beijing's multifaceted economic support for Russia, which includes mitigating the impacts of Western sanctions and export controls. Furthermore, Chinese state-owned defense companies have reportedly shipped navigation equipment, fighter jet parts, and other dual-use technologies to Russian defense firms. This includes over $12 million worth of drones and drone components, as of March, based on data from third-party providers and Russian customs records.
Representative Jim Himes of Connecticut, a ranking Democrat on the House Intelligence Committee, emphasizes the critical role China plays in enabling Russia's war against Ukraine. Despite the Biden administration's warnings to China against providing weapons to Russia for the conflict, the Chinese Embassy in Washington defends its stance. Embassy spokesperson Liu Pengyu asserts China's objective and just position on Ukraine, emphasizing its efforts in promoting peace talks and denying the sale of weapons to parties involved in the crisis.
Post-Russia's invasion and subsequent Western sanctions, China has emerged as Russia's most important trade partner. The report reveals a significant increase in China's import of Russian energy resources. For instance, China's crude oil imports from Russia peaked at 1.65 million barrels per day in March, surpassing India as the largest buyer. China also provides super tankers and insurance for transporting Russian crude to Chinese ports, circumventing restrictions imposed by international sanctions.
Another critical aspect of the report is the procurement of U.S.-made semiconductors by Russia through transactions with small and medium-sized Chinese firms, despite U.S. export restrictions. This underlines the challenges in tracking Russia’s circumvention of export controls, especially in transactions involving foreign products incorporating U.S. technology. Additionally, to sidestep financial sanctions, China and Russia have increased bilateral trade in the Chinese yuan, with Russian exports paid for in yuan rising to 14% by September 2022 from less than half a percent before the war, as per Russia’s central bank.
This comprehensive analysis from the ODNI presents a clear picture of China's pivotal role in supporting Russia amidst the ongoing Ukraine conflict, highlighting the complexities of international trade, diplomacy, and strategic partnerships.