Beijing Pushes Back Against New US Sanctions Threat

After U.S. National Security Adviser Jake Sullivan last week said the Biden administration is preparing new sanctions against Chinese entities, including possibly financial institutions, for supporting Russia's military, China said it “firmly rejects all kinds of illicit unilateral sanctions” that the U.S. may be considering.

“China is neither the one that created the [Russia-Ukraine] crisis nor a party to it, but has worked actively to enable talks for peace and a political settlement of the crisis," a Chinese Foreign Ministry spokesperson said during a July 22 regular press conference in Beijing. The U.S. should "work constructively for the political settlement of the crisis, rather than shift the blame to China and drive a wedge between China and other countries,” the spokesperson added, referencing remarks made July 19 by Sullivan during a conference hosted by the Aspen Institute.

The spokesperson added that China and Russia “have normal cooperation, which does not target any third party and should not become a target for external interference or coercion.”

Sullivan said last week that Chinese companies' support for Russia's military is "profoundly outside of the bounds" of what the U.S. wants to allow. He said the administration is considering using new authorities outlined in a December executive order that gave the Treasury Department the ability to sanction foreign banks and other financial institutions that are helping to facilitate transactions of dual-use exports to Russia (see 2401120051 and 2312220023).

"We didn't put that in place so that it could just sit there," Sullivan said of the executive order. "We put that in place so that when we find a bank that we feel falls within that sanctions regime, we can do something about it."

He added that China "continues to be a major supplier of dual-use items to Russia's war machine," and "what we have shown over time is that we have been prepared to tighten the screws to apply sanctions against specific entities and individuals, including in China" and other countries supporting Russia.

"That pattern will continue as we go forward," he said. "I think you can expect additional sanctions measures as we watch this picture continue to evolve in the coming weeks."