Commentary
While Russia’s war in Ukraine rages, Chinese leader Xi Jinping is watching with interest—especially the canceling of Russian access to Moscow’s own foreign investments, including hard currencies, which it thought it could use to backstop the invasion.
China, too, has invested in foreign assets, including
$3.2 trillion in foreign reserves that it has tried to sell over the past few months.
Using these currencies requires the cooperation of banking authorities in the countries from which they came. China’s investment would be vulnerable should the Chinese Communist Party (CCP) decide to commit an international crime, such as helping Moscow even more than it has or launching an invasion of Taiwan.
Apparently, to that end, the CCP is stockpiling commodities such as oil and grain, attempting to make its economy self-reliant by reshoring supply chains to itself and countries that it trusts, decoupling its financial system from major democracies, evolving its economic strategy through
stress tests and simulations, and legally formalizing its counter-sanctions capabilities.
Reporting on May 3 indicates that China’s independent refiners are
undermining Western sanctions against Russia through discreet oil purchases at steep discounts. The purchases are moving from China’s large state-owned commodity traders to small independent refiners “to avoid attracting scrutiny and being hit by US sanctions,” according to the Financial Times.
On May 4, HSBC bank’s biggest shareholder
called for splitting the bank’s most important profit centers in Asia from its headquarters in the UK. The shareholder, a Chinese insurance company, likely had top cover from Beijing to thus shield the bank from Western sanctions.
Beijing subsidized
computer chip production with billions of dollars and is promoting domestic production of
grain.
In December, Xi said, “The Chinese people’s rice bowl must be firmly held in their own hands at all times, and the rice bowl must mainly contain Chinese grain.”
This is the fortress mentality of someone with criminal intent who expects to be sanctioned. Given that Xi is the world’s most powerful and genocidal dictator, in cahoots with the likes of Russian President Vladimir Putin and North Korean leader Kim Jong Un, the crimes are likely premeditated and of the gravest threat to humankind.
The CCP is unrepentant over its genocide, its support for Russia and North Korea, and its hypocritical promotion of a “
new type of international relations,” which, despite its flowery words, likely means ignoring Western norms of democracy and human rights in favor of a Beijing-centric world focused on growing CCP power through the help of any pariah states desperate enough to join.
The response will be competing for U.S. and Chinese sanctions that bifurcate the global economy.
Because of the Uyghur genocide, for example, the United States is increasing pressure on China’s Hikvision, the world’s largest surveillance camera maker. While Hikvision was already on the “
entity list,” denying it the ability to purchase anything from U.S. companies, the likely new
sanction would have a global effect. Any of more than 180 countries that currently use Hikvision cameras could face secondary U.S. sanctions if they continue the purchases.
However, entities that comply with U.S. or European sanctions could break China’s 2021
anti-foreign sanction law. While the Biden administration has said in the past that it doesn’t ask countries to take sides, increasing sanctions and counter-sanctions creates a catch-22 that will force their hand.
The CCP’s actions are driving its economy and the world toward a costly decoupling and indicating the regime’s intention to expand what should be recognized as not just healthy competition or even unhealthy adversarial relations. Beijing is setting its autocratic form of government onto a collision course with democracies. The mutual insecurities that result could easily spiral out of control and into military conflict.
Giving Beijing time to prepare its economic defenses invites such aggression. Better to mitigate the risk now, while we still have the leverage, through much tougher economic measures. The regime is already guilty and sanctionable. Rather than kicking the can down the road yet again, deny the CCP the strength to commit more international crimes through sanctions now, not later.
Views expressed in this article are opinions of the author and do not necessarily reflect the views of The Epoch Times.
