China faces losing business in Europe over Ukraine stance says expert
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A number of Chinese firms used local currency for Russian coal deliveries in March, with the first cargoes set to arrive this month. This comes after the EU announced a sanction package including a ban on Russian coal imports, which is poised to take effect from mid-August. The move would likely see Russia lose out on billions, given that the EU handed Putin £4billion for coal imports last year.
It marks part of the EU’s fifth sanction package against Russia since the start of its invasion in mid-February.
But MEP Guy Verhofstadt does not think the sanctions package will be particularly damaging.
He said in a speech in European Parliament: “The reality is that it does not work because the fifth package is what? Coal. It is ridiculous, it is only three percent of the imports from Russia.”
But China appears to be stepping in and could help Russia limit whatever damages the EU coal ban may cause.
The coal shipments are reportedly the first commodity imports to have been paid for in yuan since Western sanctions targeted Russia’s central banks by cutting them off from the international system.
Russian crude oil exporters have also offered Chinese buyers the choice to pay in yuan.
This marks a significantly different tone to the one Russia is taking with the West.
The Russian President has demanded that “unfriendly countries’ purchase gas in Russian rubles, giving them an April 1 deadline.
He warned: “It is from those accounts that gas will be paid for, starting April 1.
“If such payments aren’t made, we will consider this a failure by the client to comply with its obligations.”
But the threat to cut off gas was downplayed after a new deal indicated that European buyers could in fact keep buying gas in euros and dollars.
It came after the Western leaders refused to give in to Putin’s demand.
China is not the only country offering Russia a way to swerve sanctions.
While the EU has come under fire for lagging behind its counterparts on banning Russian oil, the UK and US have taken a tougher stance.
The US has slapped an embargo on Russian oil, coal and liquified natural gas, while Britain has pledged to phase out oil imports by the end of the year.
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But India has offered Putin another lifeline after pledging to keep buying Russian oil at a discount at a time when prices are soaring.
India’s Finance Minister Nirmala Sitharaman said: “I would put my country’s interest first, I would put my energy security first.
“If the fuel is available at a discount, why shouldn’t I buy it?”
Several EU rebels are also pushing back on oil sanctions as the bloc mulls over slapping down a ban, including Germany, Hungary and Austria.
This is despite the bloc handing Russia a staggering €48.5billion (£38billion) for crude oil imports in 2021, and €22.5billion (£19billion) of petroleum oils other than crude.
But Ursula von der Leyen has promised to keep “working on” oil sanctions as the bloc readies to go tougher on Russia.
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