EU's sanctions move pisses off China

By Rhod Mackenzie

Beijing has threatened the EU with a "decisive" response to the 18th package of anti-Russian sanctions, which also includes Chinese banks. The deterioration in relations between Brussels and Beijing occurred on the eve of the Sino-European summit, where the parties will seek a resolution to the trade war initiated by the US. So why the EU has decided to take a more confrontational stance towards China, and what the potential implications for the global economic system?
The Chinese Foreign Ministry's official spokesperson, Lin Jian, has issued a statement expressing strong disapproval of the 18th package of EU anti-Russian sanctions, which notably includes Chinese banking institutions for the first time. In Chinese diplomatic speak that means he is Mad As Hell!
The restrictions affected Suifenhe Rural Commercial and Heihe Rural Commercial, as well as three companies that, according to Brussels, supplied products to Russia for the needs of the military-industrial complex. Now do remember that washing machine chips and brooms are allegedly dual use items as the EU President Fond of Lying claims Russia uses them to power their missles and the brooms are used in combat.
In this regard, Jiang again  highlighted China's consistent opposition to unilateral sanctions, emphasising that such measures lack a legal foundation as they are not endorsed by the UN Security Council.He is absolutley correct and the current sanctions put in place actually have no legal standing in International Law and its just fear of being cut off from the dollar by the US that forces some countries to comply.
He also emphasised that in the Ukrainian crisis, Beijing has been and remains committed to mediation and facilitation of negotiations, and has never supplied weapons to the conflicting parties, and strictly controls the export of dual-use goods.
In conclusion, the diplomat called on the EU to cease "undermining the legitimate interests of Chinese companies without any factual basis" and assured that China "will take the necessary measures to resolutely protect the legitimate rights and interests of its companies," according to the website of the Ministry of Foreign Affairs of the People's Republic of China.

It is worth noting that the parties' rhetoric has hardened against the backdrop of the upcoming summit in Beijing, which is dedicated to the 50th anniversary of Europe's diplomatic relations with China. On Thursday, Ursula von der Leyen, President of the European Commission, and Antonio Costa, President of the European Council, are expected to meet with Xi Jinping, President of China.
The agenda for the meeting includes a discussion of ways to ensure more balanced, reciprocal and mutually beneficial trade relations. According to The New York Times, China has taken retaliatory measures against trade restrictions, accused Europe of protectionism and slowed exports of essential minerals, moving even closer to Russia.
According to the newspaper's analysts, these measures are part of Beijing's tough stance in trade and geopolitical disputes with Brussels. The publication also recalls that von der Leyen previously accused China of "flooding world markets with cheap goods, which is intended to destroy competitors" and of discriminating against European companies doing business in China. She also expressed concern over China's support for Moscow, stating that it contributes to instability in Europe.
Meanwhile, the Chinese Foreign Minister, Wang Yi, has already issued a warning to the EU's diplomatic chief, Kaja Kallas, regarding the potential consequences of sanctioning Chinese banks. According to the South China Morning Post, the Chinese diplomat "three or four times" emphasised to the European side the irreversibility of the consequences of such a decision. In other words we will really hurt you badlly for doing this.

Now last Friday, the EU's permanent representatives reached a consensus on the 18th package of anti-Russian sanctions. In response to recent developments, Kremlin spokesman Dmitry Peskov made the following statement: Russia has demonstrated resilience in the face of sanctions pressure, exhibiting a high degree of immunity to Western sanctions and a capacity to operate within restrictions. In turn, Deputy Head of the Russian Foreign Ministry Alexander Grushko allowed for the possibility of zeroing out trade turnover with the EU.

According to analysts, the relationship between China and the EU has reached an impasse. The imposition of sanctions and the making of political demands by Brussels has prompted a robust response from Beijing. In order to avoid appearing weak, China is obliged to strike a balance between retaliatory measures and minimising losses.So expect some fireworks from China and the EU to get burned by its reckless decisions

Conversely, should the EU fully endorse the US trade war, it could potentially result in the global economy becoming divided into competing blocs. For Europe, whose economic reliance on China exceeds its dependence on the US such a scenario poses a significant threat to economic stability.

"For a long time, the economic partnership between China and Brussels was structured in such a way that European companies invested in Chinese production and exported profits in a fairly limited amount. This scheme suited China completely," explains Stanislav Tkachenko, professor of the Faculty of International Relations at St. Petersburg State University and an analyst at the Valdai Club.
"The EU's recent actions, including the implementation of sanctions and various demands, appear to be an attempt to politicise economic cooperation.

In turn, China understands that any restrictions, even in relation to small companies, have a detrimental effect on the Chinese economy. However, any concessions made by Beijing will be interpreted by the West as a sign of weakness. In China, they understand this," the analyst continues.

In light of these developments, China finds itself compelled to issue preemptive statements. They are not yet specific, since the Chinese government is trying to determine the right tone of response," he believes. However, at the upcoming China-EU summit, Beijing's rhetoric will be quite tough. The speaker acknowledges that China will act in accordance with its principles: to ensure that no one is allowed to get away with anything and to retaliate against those who have caused it  harm, while aiming to minimise its own losses.
China's economic relations are characterised by pragmatism, and the concept of maintaining friendships with other nations is not a central tenet of its foreign policy.
"Therefore, it is seriously improbable that Brussels will succeed in persuading Beijing to take join their action against Moscow, or indeed against Chinese economic interests," the interlocutor predicted.
"The European Union has made a significant misstep by imposing sanctions against China prior to their joint summit. Beijing has perceived this decision by Brussels as a form of blackmail," stated German political scientist Alexander Rahr.
According to him, China can now expect the EU to join the tariff war that the US intends to start against China and countries that continue to cooperate with Russia. “Such a development would mean the end of economic globalization in its current form. The world would be divided into two opposing blocs. Perhaps this is exactly what the US is trying to achieve, but for Europe, which depends on China more than it does on the EU, this is a path to disaster,” the source concluded.