According to a report from Bloomberg, the US is counting on China and its tech companies to aid the international community in sanctioning the Russian regime. Following a series of unprecedented sanctions levied at the Russian state following its invasion of Ukraine last week, the US knows that any western-bound sanctions will be less effective if Putin's Russia can turn around and strengthen its ties with China. This is exactly what seems to be happening - Russia's ban from the international banking communications system, SWIFT, saw an equally swift adoption of China's competing solution, CIPS.
China is one of Russia's largest tech suppliers - it's estimated that Chinese imports account for a third of its semiconductor and more than half of its computer and smartphone imports. And some of China's companies are still allowed to receive technology from the US - companies such as Lenovo, Xiaomi and Semiconductor Manufacturing International Corp (SMIC). SMIC itself has already been added to the entity list by US officials, prompting a veritable flight of management talent. This talent flight followed the foundry strengthening ties with the Chinese government as it stepped up to provide funding that allowed SMIC to focus on high-volume manufacturing investments, including the construction of two semiconductor fabs in the country.
Chinese companies, in particular, are now left between a rock and a hard place in that they risk the wrath of the US should they provide products to Russia that include US-based technology. At worst, failing to comply with international sanctions could lead to these companies facing increased restrictions or outright bans from US tech themselves - and their executives could face criminal prosecution. This would be a hard pill to swallow for Beijing, which has taken an impossibly neutral stance when it comes to the Ukraine-Russia war following a tightening of relations between China and Russia in early February.
"China doesn't approve of resorting to sanctions to try to resolve problems, even more we oppose illegal, unilateral sanctions without an international mandate, "Foreign Ministry spokesman Wang Wenbin said at a regular press briefing in Beijing. He added that nations "should not harm the legitimate rights and interests of the Chinese side."
The US-China trade war has already dealt massive blows to China's technological and economic expansions, hamstringing the country's capacity to develop cutting-edge manufacturing processes. This prompted the government to accelerate its program for technological and semiconductor independence from the west and has brought the focus of attention to its neighbor Taiwan - the globe's capital for semiconductor manufacturing.
The situation is sensitive in that Beijing is undoubtedly looking to strengthen its ties with Russia and has repeatedly faced setbacks stemming from the US's trade war. While it seems that Washington is, for now, basing its interactions with Chinese companies surrounding the export ban to Russia with a more honeyed approach, scenarios exist that could lead to new additions to the entity list. Geopolitics and international relations are some of the most sensitive stages one can act upon. Should Beijing feel too smothered by technology bans - or as a victim of splash damage from the Russian bans - it could take a page from Putin's book. Taiwan and its technological treasure-trove are just 160 km away from mainland China - and there are already scenarios for that eventuality.
