Opinion
CommentSanctions against China and Russia are reaching breaking point across a wide range of commodities, according to a new report this week. Export controls on high-efficiency computer chips to China, for example, have been ineffective in preventing the chips from being used in Beijing's nuclear weapons labs. Decades after the sanctions were imposed in 1997, one of the main Chinese Communist Party laboratories continued to acquire controlled chips. These acquisitions are likely to continue to this day. US vendors of chips used by China's nuclear weapons industry include California-based Intel and Nvidia. Similar problems concern sanctions against Russia. The sanctioned items, which include everything from sonars to luxury cars to heat pumps, can legally cross the land border into Russia from Finland, for example, as long as they are headed for third countries like Kazakhstan or Georgia. However, once the items reach Russia, Moscow obviously does not apply the sanctions against itself. Sanctioned items can be sold to Russian buyers for a premium. Oil is Russia's most profitable export, and China is Russia's top export destination. "Increased purchases of Russian exports by China, driven by energy sales, have more than offset declines in major Western trading partners, including the US, Britain and some EU countries," according to the Wall Street Journal. Therefore, the sanctions against Russia and China have pushed their trade towards each other and away from the rest of the world. This makes their defense production supply chains more resilient. For example, China ships $2.45 billion worth of drones, semiconductors and microchips to Russia, all of which can be used for military purposes, while Kazakhstan, Kyrgyzstan and Turkey also sell chips to Russia. As of December 2021, the United Arab Emirates and Singapore continued to export drones to Russia, according to Free Russia Foundation data analysis. Russia's share of imports increased to China, Turkey and Italy between 2021 and 2022. The latter country is not the only democratic trade with Russia. a small Indian company that had never operated a boat before. The Indian company now supplies oil to an extensive network in India, Turkey and the Mediterranean. A Dubai-based company and a Greece-based company also transport Russian oil. That's partly on purpose. Most of Russia's oil is sold below the $60 a barrel imposed by the West as an alternative to a full ban. There were fears that a full ban would exacerbate energy price inflation. But the lack of a ban combined with an artificially low price also increases Russia's share of the global energy export market. Russia's oil exports rose to almost 160 billion barrels in January from around 140 billion barrels in December. The US economy is one of the beneficiaries, but only in the short term. Russian oil, for example, is refined in India and likely exported to sanctioned countries, including the United States. This increases the supply of oil and gas in the US markets and reduces its price. Australia, the Netherlands, South Korea and Singapore also benefit. But the biggest beneficiary of all is Russia. It continues to rake in over $100 billion in oil revenue despite threatening war against NATO and waging war against Ukraine, including its innocent civilians. The world is in a precarious state. The Chinese communist regime is planning a major invasion of Taiwan that could take place in the next few years. Iran is adding fuel to the fire by supplying Russia with lethal drones. According to official information, the Iranian arms factory was attacked by the Israeli secret services on January 28. China and North Korea are expanding their nuclear weapons capabilities to the point where the majority of South Korean citizens support acquiring their own nuclear deterrent. the correct approach. Failing to punish them for their aggression would provoke more of the same not only from them but from other dictators around the world who are watching the United States and our allies respond to any sign of weakness. But sanctions must be imposed with clear eyes. The increased sanctions against the four bandits will bring them closer together and could provoke them further. At best, this could deter some of them from aggression and move them closer to democratization. The only other alternative is appeasement. On this path there is more conflict with an emboldened and strengthened opponent. More sanctions and export controls are therefore the least risky of a range of risky options. The opinions expressed in this article are the opinions of t
udumbara
February 3, 2023-05:34Updated February 3, 2023 - 5:37 am
Comment
According to new reports this week, sanctions against China and Russia are seeping into a wide range of assets until they expire.
US export controls on high-efficiency computer chips to China, for example, have been ineffective in preventing the chips from being used in Beijing's nuclear weapons labs. Decades after the sanctions were imposed in 1997, one of the main Chinese Communist Party laboratories continued to acquire controlled chips. These acquisitions are likely to continue to this day. US vendors of chips used by China's nuclear weapons industry include California-based Intel and Nvidia.
Similar problems plague sanctions against Russia. The sanctioned items, which include everything from sonars to luxury cars to heat pumps, can legally cross the land border into Russia from Finland, for example, as long as they are headed for third countries like Kazakhstan or Georgia. However, once the items reach Russia, Moscow obviously does not apply the sanctions against itself. Sanctioned items can be sold to Russian buyers for a premium.
Oil is Russia's most profitable export, and China is Russia's top export destination. "Increased purchases of Russian exports by China, driven by energy sales, have more than offset declines in key Western trading partners, including the United States, the United Kingdom and some European Union countries," according to the Wall Street Journal.
Therefore, the sanctions against Russia and China have pushed their trade towards each other and away from the rest of the world. This makes their defense production supply chains more resilient. For example, China ships drones, semiconductors, and microchips to Russia, all of which can be used for military purposes.
Despite specific sanctions against Russian chip imports, they have risen from $1.82 billion to $2.45 billion between 2021 and 2022.
Kazakhstan, Kyrgyzstan and Turkey also sell chips to Russia. As of December 2021, the United Arab Emirates and Singapore continued to export drones to Russia, according to Free Russia Foundation data analysis. The share of imports from Russia to China, Turkey and Italy increased between 2021 and 2022.
This last country is not the only democracy that negotiates with Russia.
Shortly after the sanctions went into effect, a major Russian shipping company handed over control of 25 of its tankers to a small Indian company that had never managed a vessel before. The Indian company now supplies oil to an extensive network in India, Turkey and the Mediterranean. A Dubai-based company and a Greece-based company also transport Russian oil.
This is partly intentional. Most of Russia's oil is sold below the $60 a barrel imposed by the West as an alternative to a full ban. There were fears that a full ban would exacerbate energy price inflation.
But the lack of a ban combined with an artificially low price also increases Russia's share of the global energy export market. Russia's oil exports rose to almost 160 billion barrels in January from around 140 billion barrels in December.
The US economy is one of the beneficiaries, but only in the short term. Russian oil, for example, is refined in India and likely exported to sanctioned countries, including the United States. This increases the supply of oil and gas in the US markets and reduces its price. Australia, the Netherlands, South Korea and Singapore also benefit.
But the biggest beneficiary of all is Russia. It continues to rake in over $100 billion in oil revenue despite threatening war against NATO and waging war against Ukraine, including its innocent civilians.
The world is in a precarious state. The Chinese communist regime is planning a major invasion of Taiwan that could take place in the next few years. Iran is adding fuel to the fire by supplying Russia with lethal drones. According to official information, the Iranian arms factory was attacked by the Israeli secret services on January 28. China and North Korea are expanding their nuclear weapons capabilities to the point where the majority of South Korean citizens support acquiring their own nuclear deterrent.
Increasing sanctions on Russia, China, Iran and North Korea, the world's four most dangerous dictatorships, is probably the right approach. Failing to punish them for their aggression would provoke more of the same not only from them but from other dictators around the world who are watching the United States and our allies respond to any sign of weakness.
But sanctions must be imposed with clear eyes. The increased sanctions against the four bandits will bring them closer together and could provoke them further.
At best, it could deter some of them from aggression and democratization.
The only other alternative is appeasement. On this path there is more conflict with an emboldened and strengthened opponent. More sanctions and export controls are therefore the least risky of a range of risky options.
The opinions expressed in this article are those of the author and do not necessarily reflect the views of The Epoch Times.