The US just announced sanctions against Chinese companies and individuals for their alleged support of Russia’s military via the sale of so-called dual use goods, as well as yet more sanctions against Russia for among other things, the charge that Russia deployed chemical weapons in Ukraine. Since the Western press, presumably following official messaging, talked up Blinken’s recent trip to China and his lead demand, that China stop sending certain dual-use items to Russia, we’ll focus on the China action. Note that the fact that the US, EU, and UK have already been sanctioning Chinese companies over alleged support for Russia’s military has largely gone under the radar.1
The fast way to assess the seriousness of the delivery on the US threat display of sanctioning China over the US belief that Chinese trade is helping Russia’s military is the placement of news stories. The article is below the fold at the Financial Times, nowhere to be found on the landing pages of the Wall Street Journal or the Asian version of Bloomberg. Instead, Bloomberg gave a prominent position to this piece:
Before we get into what the sanctions seem to amount to, a reason for the lack of press interest is that the Biden Administration did not sanction any banks, as it had threatened to. That was widely expected to produce retaliation from Chinese, even if the US listed only some small fry.
Mind you, as with US and EU sanctions against Russia, the US will likely keep slapping on against China. Since sanctions are generally un- to counter-productive, so this round was never set to do all that much damage even before you look at what weak tea they seem to be. Yet the officialdom wants to be seeing to be Doing Something, and so somehow has convinced itself that Doing Something That Demonstrates Your Impotence is better than doing nothing.
To keep this post to a manageable length, we’ll skip over the inconsistencies in the US position, that it gets to arm allies openly but other great powers can’t even indirectly back theirs. This is an attempt at might makes right even though the US is not all that mighty these days.
Indeed, even though there are sure to be multiple motives for these China sanctions, it seems a reasonable guess that the Collective West being a victim of its own propaganda is a biggie. The US, UK, EU, and Ukraine spent enormous numbers of pixels depicting Russia as militarily backwards and weak. Remember how they were alway about to run out of missiles, and now inexplicably have the run of Ukraine’s air space? How per Ursuala von der Leyen, Russia was having to harvest chips from washing machines?
Now that Russia is decisively winning and pressing its advantage, there must be a narrative and ego-saving explanation. Those dastardly Chinese! They must have rebuilt Russia’s military after we so decisively mauled it!
The reason the faltering Ukraine war really does seem to be a significant driver of these China sanctions, and not just a pretext, is the timing. This is not a good juncture to be escalating with China (and the weakness of this current rounds indicates some adults get that). The Fed is talking about tightening. Sanctions blowback can easily squeeze supply chains and worsen inflation. Biden looks weaker in the latest national polls The last thing this Administration needs is anything that squeezes household budgets or puts Mr. Market in a swoon. If the Administration were to want to look tough with China, much earlier or much closer to the election (so any China response would not yet his the US) would be better.
It would be helpful to get informed reader input on whether Chinese supplies to Russia are actually are critical or meaningful to Russia’s military production. Russia fanboys reflexively say “no” without substantiation or elaboration, which is not exactly convincing. On the side of the US/Ukraine skeptics is the famed June 2022 Royal United Services Institute report by Alex Vershinin, The Return of Industrial Warfare. Vershinin found it would take the so-called Collective West a full decade to catch up to Russia’s manufacturing capacity, citing comparative standing in multiple weapons categories. A counter-argument is that Russia has massively ramped up its drone output, both in number and type, since the war started. Its workhorse Lancet is home grown but it did get the design for the Geran drone from Iran.
One of the items that the US singled out in Blinken’s gratuitously impolite statement from Shanghai was nitrocellulose. Alexander Mercouris pooh-poohed the idea that China was a critical supplier. He said many countries, including Russia, make it.
But first on Blinken’s list was machine tools. Contacts have argued that machine tools need to be continually serviced and fixed with parts and therefore it needs a constant supply. Other contacts with factory experience counter that old US machine tools used to last forever, and if Russia had been able to buy machine tools made to the former US standard, it would not need to buy all that many. A related question are the claims made by Brian Berletic and Andrei Martyanov about Russia’s military making sure its arms-makers have surge capacity, as in it would not need to do much in the way of expansion to considerably increase output.
Even if the US’ machine tools take is correct, there are reasons to doubt the caliber of the trade analysis:
This devastating report shows how a so-called “China expert” who was candidate to be US Undersecretary of Commerce was 100% wrong in claims he made to dub Chinese companies “national security threats”.
This fake “expert” helps craft US sanctions on Chinahttps://t.co/zj1cDM77k2
— Ben Norton (@BenjaminNorton) April 30, 2024
Now of course, we have to return to the premise. Even if the US has China dead to rights, so what? The US persists in the fantasy that it can drive a wedge between Russia and China, after telling both in many ways that it is determined to cut each down to size. China instead, to US consternation, has not only refused to criticize Russia for the war in Ukraine (making it easier for other nations to resist US arm-twisting) but has even taken to embarrassing the US when it can. One example was at a Ukraine peace summit where the weird intent was to get all sorts of countries to unite behind the barmy Zelensky plan, of Russia withdrawing to its 1991 borders and being subject to various tortures, like war crime tribunals and reparations. As if mere disapproval has any impact, as the genocidal Israel is demonstrating.
Russia was of course not invited. China, who did attend, disrupted the confab by asking why Russia was not there and how could they think they could accomplish anything without Russia. Other non-Collective West parties piled on.
Even so, I have had colleagues who are otherwise sane argue that China would relent: The US economy is running hot due to all the fiscal stimulus and is thus importing a ton. China’s economy is in the doldrums and they do not want to risk US demand. Yet another proof of how effective the spin doctoring has been.
Finally, to the main event. An early account, which Lambert cited yesterday in Links, let the cat out of the bad. Anadolu Agency reported, “The US has sanctioned 31 Chinese companies among its 200 targets over Russia’s war in Ukraine.” The company targets in China are what China cares about. Sanctioning individuals is a stunt. And the number of businesses hit is comparatively small, and from what I can tell from the Financial Times and the lack of other headlines, none very consequential. The comments section of the Financial Times similarly seems unimpressed, even with huffy defenses of the need to whack China.
From the pink paper:
The targets of the sanctions announced on Wednesday include two Chinese groups that provided Moscow with nitrocellulose, an ingredient for gunpowder and rocket propellant, as well as Russian importers of the chemicals.
Again, if Mercouris is right about nitrocellulose, is this a deliberate wet noodle lashing, or inept sanctions design and messaging?
Back to the Financial Times:
The Chinese embassy in Washington said China “firmly opposes” what it described as “illegal unilateral sanctions”. It said Beijing “oversees the export of dual-use articles in accordance with the laws and regulations”.
The Chinese targets include groups that allegedly supplied Russia with drones, weapons and ammunition, in addition to chips, sensors and other military-related technology…
The Treasury placed sanctions on two Chinese groups — Wuhan Global Sensor Technology and Wuhan Tongsheng Technology — that officials recently told reporters were helping Russia. Wuhan Global produced infrared detectors for a Russian manufacturer of military optics….
It also targeted Juhang Aviation, a Shenzhen-based company that produces drone-related equipment, including propellers, signal jammers, sensors and engines…
Ukrainian troops are struggling to hold their positions along the front line in the east of the country.
“Combined, our support for Ukraine and our relentless targeting of Russia’s military capacity is giving Ukraine a critical leg up on the battlefield,” [Treasury Secretary Janet] Yellen said.
Wednesday’s sanctions also target Russia’s chemical and biological weapons programmes, according to the Treasury.
The US also designated shipping operators that have continued to support the development of Russia’s Arctic LNG 2 project after it was sanctioned last year.
Among them is Red Box Energy Services, a Singapore-based company founded by US-born shipping executive Philip Adkins. The journey of Red Box-operated vessels, the Audax and Pugnax, through the ice-bound Northern Sea Route to deliver equipment to Arctic LNG 2 was documented in a Financial Times investigation in February. Adkins has not been designated by the US. He did not immediately respond to a request for comment.
The US Department of State said: “Today’s actions demonstrate the United States’ continued resolve to constrain the Arctic LNG 2 project’s production and export capacity and limit third-party support to the project.”
The story mentions that the Senate has passed a bill which would ban US imports of enriched uranium from Russia, which now provides 20% of US supply. The White House backs the legislation….which includes temporary waivers though 2028. This is shades of St. Augustine’s “Grant me chastity and continence, but not yet.” And aside from that, has anyone in the Beltway worked out that there won’t be much of Ukraine left by then?
In any event, the good news is that the Biden Administration seems to have realized all it can afford to do is impose some feeble sanctions against China. The bad news is that as things keep getting worse in Ukraine, it may feel pressured to do more to preserve what is left of its manhood.
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1 Some examples from a March 2024 report, China’s Position on Russia’s Invasion of Ukraine by the U.S.-China Economic and Security Review Commission:
February 23, 2024
- [Sanctions] U.S. Department of Commerce adds eight entities from China to its Entity List for activities supporting Russia’s defense-industrial sector and war effort. Five of the eight entities allegedly facilitated the diversion of controlled microelectronics to Russia’s military and intelligence authorities, while two others allegedly procured U.S.-origin machine tools, electronics test equipment, and machine tool spare parts for Russian end-users.
- [Sanctions] The European Union approves its 13th package of sanctions in response to Russia’s invasion of Ukraine. Sanctions includes three Chinese firms and one Hong Kong-based company due to their role in trading electronic components of EU-origin products to Russia.
February 22, 2024
- [Sanctions] The UK announces sanctions targeting individuals and businesses sustaining Russia’s war in Ukraine, including three Chinese companies. According to the UK Government, China’s Finder Technology and Juhang Aviation Technology allegedly supplied sanctioned electronics to Russia, and Beijing Micropilot Flight Control Systems’ unmanned aerial vehicle (UAV) engines were found in UAVs used by Russian forces in Ukraine….
January 11, 2024
- [Sanctions] The Kyiv School of Economics releases a joint study with the Yermak-McFaul International Working Group on Russian Sanctions that details how Russia continues to import components for military production despite current export controls. According to the study, supply chains for battlefield goods and critical components shifted in large part because of current export controls. Russia now imports most of these goods from China…..
December 3, 2023
