Tuesday, April 9, 2024
Year : 2, Issue : 15
US Treasury Secretary Janet Yellen wrapped up four days of talks in China with a warning to the country’s banks and exporters: If you help bolster Russia’s military capacity, Washington will come after you.
“I stressed that companies, including those in the PRC, must not provide material support for Russia’s war, and that they will face significant consequences if they do,” Ms Yellen said on Monday in prepared remarks for a press conference at the US ambassador’s residence in Beijing, using an abbreviation for the People’s Republic of China.
“Any banks that facilitate significant transactions that channel military or dual-use goods to Russia’s defence industrial base expose themselves to the risk of US sanctions,” she said.
The Biden administration is trying to crack down on firms worldwide that help Russia evade the net of sanctions that the US and its allies have imposed on Moscow since its invasion of Ukraine in 2022. While China has been the target of past warnings, Ms Yellen’s message, delivered in the Chinese capital, was unusual for its direct threat of sanctions.
It came on the day Russian Foreign Minister Sergei Lavrov arrived in Beijing to discuss issues including Ukraine. While China describes its position on the war as neutral, trade with Russia has surged since it began.
America’s ultimate weapon against financial institutions is the Treasury’s ability to cut off their access to US dollars, an existential threat for any bank operating internationally.
That such a threat now looms over Chinese lenders is another example of the way the two superpowers increasingly find themselves on opposite sides of geopolitical and economic fault lines – pushing even Ms Yellen, arguably the least hawkish of senior Biden administration officials who deal directly with China – to go on the offensive.
Source: AFP
