Blinken-Wang talks in Munich worsens US-China tensions…
Russia circumventing export controls via China. Most of the semiconductors Russia needs are less advanced, and China makes plenty of those at the moment.
Goods appear to be finding their way to Russia, just through a longer route. Exports from European countries to countries like Armenia, Azerbaijan, Belarus, Kazakhstan, Kyrgyzstan, Turkmenistan and Uzbekistan have exploded, as have exports from those countries to Russia, according to Matthew Klein, an economics writer who is tracking trends in trade volumes. Both this data, and Russian tax collections, suggest that the country’s overall imports have essentially recovered to pre-war levels, he said.
In particular, the United States and its allies appear to have had limited success in stopping the trade of so-called dual-use technologies that can be used in both military equipment and consumer goods.
In December, Russia’s imports of chips had recovered to more than two-thirds of their value last February, just before the war began, according to Silverado. China and Hong Kong, in particular, together accounted for nearly 90 percent of global chip exports to Russia by value from March to December.
Shipments from China to Russia of smart cards, light-emitting diodes, polysilicon, semiconductor manufacturing equipment and other goods have also risen, the firm said.
“While we are concerned about Russia’s deepening ties with them, Beijing cannot give the Kremlin what it does not have, because China does not produce the advanced semiconductors Russia needs,” Mr. Adeyemo said during his remarks. “And nearly 40 percent of the less advanced microchips Russia is receiving from China are defective.”
But Ivan Kanapathy, a former China director for the National Security Council, said that most of what Russia needed for its weapons were less advanced chips, which are manufactured in plenty in China.
“The U.S. government is very well aware that our export control system is designed in a way that really relies on a cooperative host government, which we don’t have in this case,” Mr. Kanapathy said.
He added that it was “quite easy” for parties to circumvent export control through the use of front companies, or by altering the names and addresses of entities. “China is quite adept at that.”
https://edition.cnn.com/2023/02/22/economy/china-russia-economic-ties-ukraine-intl-hnk/index.html
“China has supported Russia’s war economically in the sense that it has ramped up trade with Russia, which has weakened Western efforts to cripple Moscow’s military machine,” said Neil Thomas, senior analyst for China and Northeast Asia at Eurasia Group.
“Xi Jinping wants to deepen China’s relationship with an increasingly isolated Russia,” he said, adding that Moscow’s “pariah status” enables Beijing to exert more leverage on it to obtain cheap energy, advanced military technology and diplomatic support for China’s international interests.
Total trade between China and Russia hit a new record high in 2022, up 30% to $190 billion, according to Chinese customs figures. In particular, the energy trade has risen markedly since the onset of the war.
China bought $50.6 billion worth of crude oil from Russia from March to December, up 45% from the same period the previous year. Coal imports surged 54% to $10 billion. Natural gas purchases including pipeline gas and LNG, skyrocketed 155% to $9.6 billion.
Chinese car brands, including Havel, Chery, and Geely, have seen their market share surge from 10% to 38% in a year following the exit of Western brands, according to most recent data from Russian research firm Autostat. And that share is likely to grow further this year, it has forecast.
In consumer electronics, Chinese brands accounted for about 40% of the smartphone market at the end of 2021. A year later, they’ve virtually taken over the industry with 95% market share, according to market research firm Counterpoint.
“Of all foreign currencies that the Russian [central] bank had its reserves in, it is only Chinese yuan that was not frozen and remains a ‘friendly’ one,” said Kireeva.
“We are likely to see further de-dollarization of Russia’s foreign trade in general and [an] increasing share of trade in national currencies with all states that are friendly or neutral to Moscow.”
With more yuan reserves, Moscow is able to use the Chinese currency to stabilize the ruble and its financial markets. The ruble has plunged by more than 40% against the euro and the dollar in the past year, and the main Russian stock index has fallen by more than a third.
. Did he just now figure this out? Establishing an Asian NATO has long been in the cards, specifically due to the China threat.