EU does this for the first time with China, can Beijing ignore it?

In the 13th package of sanctions against Russia scheduled to take effect on February 24 - the second anniversary of Moscow's military operation in Ukraine - the EU has for the first time blacklisted Chinese companies as part of an effort to weaken the Russian military. Will Beijing ignore this?

Gói trừng phạt thứ 13 nhằm vào Nga: EU lần đầu làm điều này với Trung Quốc và động thái của Bắc Kinh

In its 13th package of sanctions against Moscow, the EU has blacklisted Chinese companies for the first time as part of efforts to weaken the Russian military. (Source: apa.az)

Thus, three mainland Chinese companies and one from Hong Kong (China) will be officially listed on the EU's sanctions list, after Hungary failed to use the presence of Chinese companies as a reason to block this new sanctions package.

The Chinese companies will be banned from trading and doing business with partners in the 27 EU member states. They are accused of helping Russian buyers access dual-use military and civilian goods produced in Europe, but banned from being exported to Russia by the EU. The individuals and companies also face the risk of having their assets frozen.

Three mainland Chinese companies, Guangzhou Ausay Technology Co., Ltd., Shenzhen Biguang Trading Co., Ltd., Yilufa Electronics Co., Ltd. and Hong Kong-based RG Solutions Limited., have been named in the EU’s latest round of sanctions against Russia, which also includes companies from Turkey, Kazakhstan, North Korea and India, bringing the total number of blacklisted entities to nearly 2,000.

Dan Smith, director of the Stockholm International Peace Research Institute (SIPRI), said that the sanctions imposed by the EU on Chinese companies for alleged ties to the Russian military seem to have had little impact on Russia's military campaign in Ukraine.

“So far, according to the current evidence, sanctions against Chinese companies will have little or no effect on Russia. I see this as a way to show a certain level of hostility towards China, but it will not have any effect,” the head of the Swedish think tank said.

For China, the sanctions package marks the end of a long-running effort to prevent its companies from being blacklisted over the Russia-Ukraine conflict.

According to the latest information, China has not yet made any move on this decision of the EU. However, speaking on February 19, during a visit to Spain, Foreign Minister Wang Yi made it clear that Beijing is willing to cooperate with the EU to maintain free trade, implement multilateralism and promote a multipolar world with equality, order and comprehensive economic globalization. "As long as China and the EU strengthen solidarity and cooperation, confrontation with the bloc will not happen," said Beijing's top diplomat.

The EU has previously tried to sanction a number of China-based companies. However, Beijing has not been quiet, repeatedly voicing its opposition, causing some EU member states to be wary. In an interview last June, after much persuasion to get Chinese companies off the blacklist, Beijing’s ambassador to the EU, Fu Cong, said “we are happy that Chinese companies have been removed from the list, and that shows that dialogue can be effective.”

So is it now that the increasingly close ties between Russia and China have finally prompted diplomats in Brussels to take more assertive measures, or is the EU determined to pursue a policy of reducing its economic dependence on China?

The SIPRI director frankly shared that, "part of me doesn't really understand why the EU is doing this (launching the 13th package of sanctions)".

He analyzed that currently, the Russian economy is like an "arms economy" and that trade between Russia and China is no different from that between the West and Moscow. As long as a partner trades with Russia, it is actually contributing to the Russian economy. And in fact, despite the sanctions, there is still a lot of trade between Western entities and Russia.

According to Chinese government customs data, Russia-China trade reached a record high of more than $204 billion in 2023 – surpassing the $200 billion target set by the two countries.

But Mr. Dan Smith added, “there is currently no evidence that China has transferred complete weapons systems to Russia.” And that, according to the peace expert, if the EU and other countries can recognize that sanctions are an ineffective policy tool, they should start looking for diplomatic, cooperative, pragmatic ways to achieve their goals.

“However, the question is whether the Chinese leadership is still willing to discuss and be persuaded,” said expert Dan Smith.

The director of the Stockholm International Peace Research Institute added that, with the EU or Ukraine, if China wants to broker a peace deal, it needs to clearly show “its coldness towards Russia and its dislike of Moscow’s decision on Ukrainian territory”.

Beijing and Moscow have drawn closer since the start of the Russia-Ukraine conflict, but China has consistently denied providing military support. Last week, China’s top diplomat, Wang Yi, told the Munich Security Conference that the relationship between the two countries was “non-alliance, non-confrontational and [not] aimed at any third party.”

Meanwhile, on the EU side, a diplomat familiar with the discussions said Hungary, once a close partner of Beijing, had decided not to veto the package after repeatedly citing delays and “requests for more time.” “But in the past few days, we have received indications from Budapest that they will no longer oppose the package,” the diplomat added.

Therefore, the 13th package of sanctions to continue to restrain Russia in all aspects was quickly approved by the group of 27 ambassadors of EU member states without further discussion, except for a statement from Hungary.

In fact, as the South China Morning Post reported, while Hungary did not block the 13th package of sanctions against Russia, its officials have made it clear that they do not agree. “There is no reason to veto it,” Hungarian Foreign Minister Peter Szijjarto said after a recent meeting with his ministerial counterparts, but he added that “the EU is making the wrong decision.”

"EU ambassadors have agreed in principle on the latest package of sanctions related to Russia's aggression against Ukraine. This is one of the most extensive sanctions packages adopted by the EU," Belgium, which currently holds the EU presidency, announced on social network X on February 21.

Lawyers will now prepare the document for final approval before February 24.

“I welcome the agreement on our 13th package of sanctions against Russia. We must continue to weaken Mr Putin’s military machine,” said European Commission President Ursula von der Leyen.

The EC last year introduced an option that would allow the bloc to target entire countries, rather than individual entities, for persistent flouting of its sanctions. However, the EU is unlikely to reach the consensus needed to impose such a measure, as EU unity on Ukraine is fraying, particularly on economic sanctions.

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