Putin wants Chinese banks to help military parts trade

Russian President Vladimir Putin made “three main requests” to his Chinese counterpart Xi Jinping during his visit to Beijing last month, according to a report published Monday by the Financial Times, which says it achieved only partial success.

Putin reportedly asked China to reject the Ukrainian peace conference in Switzerland this month. This request appears to have been successful since Beijing announced on Friday that it would not participate.

A second request, aimed at finding a more practical way to pay for Chinese coins purchased by the Russian army, is reportedly under consideration.

SEE ALSO: US takes close look at Chinese banks over war aid to Russia

Two sources reportedly told the FT: “Beijing and Moscow were discussing the separation of one or more banks that would finance the trade in components for the Russian defense industry, which would certainly result in US sanctions that would exclude any such bank from the broader global financial system. »

This seems like a risky and tricky thing to do, not least because the White House seems to be well aware of it, since the United States has repeatedly warned that it will sanction Chinese banks.

US Deputy Secretary of State Kurt Campbell reiterated the threat of possible sanctions against Chinese companies and banks during a visit to NATO late last week over their support for Russia's war in Ukraine.

Campbell told reporters in Brussels that there is an urgent need for European and NATO countries to send a collective message of concern to China over its actions that we view as destabilizing in the heart of Europe.

He said Chinese support was helping Moscow rebuild elements of its military, including its long-range missile, artillery and drone capabilities, as well as its ability to track battlefield movements.

Where we are mainly the focus is on Chinese companies who have been systematically involved in supporting Russia, he said when asked whether Chinese leaders and banks could be targeted.

We also looked closely at financial institutions.

Pipeline deal hits a snag

Meanwhile, a third goal of getting China to sign a deal on its Power of Siberia-2 pipeline hit a wall due to price and supply demands that Moscow deemed unreasonable, declared the ministry. FT saidciting several sources.

Analysts say this is a “big blow” for Putin because despite reports that Russia's GDP is growing, some experts say the economy the cost of his war in Ukraine was enormoushalving the country's national wealth fund and destroying its main source of income: Gazprom.

State oil giant Gazprom, which has been a major source of revenue for Moscow for many years, reported a loss of 629 billion rubles ($6.9 billion) last year, its biggest drop in a quarter of a century, after its exports to Europe had fallen to less than a tenth of what they had been in the decade before the war.

Gazprom has been in talks for years about building the Power of Siberia-2 pipeline to transport 50 billion cubic meters of natural gas per year from the Yamal region in northern Russia to China via Mongolia, a indicated Reuters.

But China has asked to pay prices close to Russia's heavily subsidized domestic prices and would only commit to buying a small fraction of the pipeline's planned annual capacity of 50 billion cubic meters of gas, he said. -he indicates.

Russian Deputy Prime Minister Alexander Novak said last month that Russia and China plan to sign a contract on the Power of Siberia-2 pipeline “in the near future.”

But analysts say the fact that Gazprom CEO Alexei Miller did not accompany Putin on his recent visit to Beijing was a sign that the pipeline project was unlikely.

NOTE: The title of this report was changed and the text redrafted on June 3, 2024.

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Jim Pollard

Jim Pollard is an Australian journalist based in Thailand since 1999. He worked for News Ltd newspapers in Sydney, Perth, London and Melbourne before traveling across South East Asia in the late 1990s. He was editor-in-chief of The Nation for more than 17 years.