Connect with us

DIPLOMACY

China learns from Russia’s sanctions experience

Published

on

China is carefully analyzing how Russia navigates Western sanctions and is proactively developing strategies to safeguard its economy in the event of a Taiwan-related crisis. Maintaining substantial foreign exchange reserves and achieving technological independence are central pillars of these efforts.

China is not only supporting Russia in weathering the sanctions and sustaining critical economic sectors but is also extracting valuable lessons from the process.

According to The Wall Street Journal (WSJ), Beijing established an inter-agency working group immediately after the war in Ukraine began. This task force systematically examines the impact of sanctions on Russia and regularly reports its findings to China’s leadership. The primary objective is to mitigate the potential fallout from similar sanctions, should the U.S. and its allies target China during a Taiwan crisis.

In this context, Chinese officials frequently visit Moscow to engage with key Russian institutions, including the Russian Central Bank and the Ministry of Finance. According to a source familiar with the matter, Beijing is “interested in every detail, from ways to circumvent sanctions to incentives for boosting domestic production.”

The working group is led by He Lifeng, Vice-Premier for Economic and Financial Affairs, who maintains direct contact with President Xi Jinping. He Lifeng is regarded as a pivotal figure in formulating strategies to insulate the Chinese economy from potential Western sanctions.

Alexander Gabuev, director of the Carnegie Berlin Centre for Russian and Eurasian Studies, remarked, “Russia is a real testing ground for China, where it can learn how sanctions work and how to deal with them. If there is a crisis over Taiwan, China knows it will face a similar wave of sanctions.”

Taiwan scenario and lessons from Russia

According to WSJ, China’s current actions do not necessarily indicate preparation for an imminent military intervention in Taiwan. However, the leadership is bracing for the worst-case scenario, including armed conflict and its associated economic consequences.

The Taiwan issue is often compared to the Ukraine crisis. During the 20th Communist Party Congress in October 2023, President Xi Jinping emphasized nationalism as a cornerstone of foreign policy amid escalating tensions with the United States and Taiwan.

One of the most significant blows to Russia at the onset of the Ukraine war was the freezing of its foreign exchange reserves by Western nations. Some of these reserves were later redirected to support Ukraine. This incident underscores why maintaining China’s foreign exchange reserves—estimated at over $3.3 trillion—is a critical priority.

To ensure their resilience, Xi Jinping personally reviewed reserve management practices during a visit to the State Administration of Foreign Exchange in late 2023.

Trade between Russia and China has surged during the conflict, reaching $240 billion in 2023. However, this trade relationship remains asymmetrical: China represents a third of Russia’s foreign trade, while Russia constitutes a smaller portion of China’s overall trade. Moreover, Russia’s exports to China primarily consist of raw materials, while China supplies Russia with a diverse range of products, including technology, machinery, and equipment.

Russia’s pre-war efforts to reduce its dependency on the U.S. dollar and bolster its gold reserves offer additional lessons for China. Beijing is taking note of the severe repercussions that sanctions can have on industries integrated into the global supply chain.

Edward Fishman, a former sanctions expert at the U.S. State Department emphasized that such sanctions could devastate manufacturing sectors reliant on international networks. This risk has driven China’s renewed focus on economic self-sufficiency and technological autonomy, which aligns with Beijing’s broader strategic goals.

DIPLOMACY

OCCRP exposed: U.S.-funded ‘independent journalism’

Published

on

The French newspaper Mediapart has revealed that the OCCRP is heavily funded by the U.S. government. According to the investigation, the funding of the OCCRP has fueled the debate about its independence and has had an impact on U.S. foreign policy interests.

The French online newspaper Mediapart has published an in-depth investigation into the massive U.S. government funding of the Organized Crime and Corruption Reporting Project (OCCRP), an independent U.S. research network for journalists.

Many media organizations collaborate with the OCCRP.

This is the result of months of joint research by Il Fatto Quotidiano in Italy, Reporters United in Greece and the American media organization Drop Site News, reports Mediapart. It is noteworthy that Norddeutscher Rundfunk (NDR) reportedly contributed to the investigation but later withdrew from publication under pressure from the OCCRP.

According to the report, the OCCRP, which came to prominence in recent years with the Panama Papers and the Pandora Papers, is largely funded by the U.S. State Department.

The U.S. federal government provided 52 per cent of the money spent by the OCCRP between 2014 and 2023. A comparison of the OCCRP’s annual audit reports and government budget documents shows that the organization has received at least $47 million since 2008.

Before the article was published, OCCRP founder Drew Sullivan accused the journalists of using ‘malicious and unprofessional’ methods.

Sullivan accused NDR reporter John Goetz of ‘spying for Russia’.

According to the investigation, the NDR decided to cease future cooperation with the OCCRP after learning of the extent of U.S. government funding.

In response to a question from Simon Zeise of the Berliner Zeitung, the organization flatly denied the accusation that it had ‘bowed to pressure’ and said the allegation was ‘unfounded’. NDR journalists had been investigating the OCCRP for a long time.

The broadcaster said that some editors had independently and autonomously decided not to continue the investigation or not to publish it. In the opinion of the legal department and the editorial staff, the investigation was not ready for publication.

The NDR announced that the departments working with the OCCRP had suspended their cooperation and shared the current research with other foreign broadcasters. To the accusation by OCCRP President Sullivan that John Goetz was a ‘Russian spy’, the NDR gave a short and clear ‘no’.

Award-winning American investigative journalist Lowell Bergmann (the character played by Al Pacino in Michael Mann’s 1999 film The Insider) said he resigned from the OCCRP board in 2015 over concerns about funding.

“I became aware of the U.S. government’s intervention. Given the complexity of the issue, I respectfully communicated my concerns and resigned from the board,” Bergmann said.

Although the OCCRP had previously indicated that it was seeking government funding, the support was unprecedented. Journalistic standards may have been violated when the OCCRP promised not to conduct research in the U.S. in exchange for funding from the U.S. State Department.

“Our policy is that a country should not report on that country with its own money. I don’t think the U.S. government would allow that,” said OCCRP President Drew Sullivan.

According to Mediapart, the U.S. government not only shuns OCCRP reporting, but also exerts significant influence by directing funds for reporting that focuses on specific countries. These countries include Russia and Venezuela, which Washington regards as enemies.

In an email sent in 2023, Sullivan acknowledged that the organization did not report on the U.S. in its early years, and that its budget was funded by Washington and George Soros’s Open Society Foundations. We couldn’t take money from the U.S. government or Soros and report on the U.S.,’ he admitted to Mediapart.

The OCCRP’s board of directors, however, said that all grants were given without the donors’ right to interfere in editorial policy. However, the OCCRP management refused to provide copies of the contracts in question.

On the other hand, Shannon Maguire of the U.S. Agency for International Development claimed that the Washington administration does not interfere in the OCCRP’s editorial decisions and that they are 100 per cent independent. Sullivan, on the other hand, argued that the U.S. government is “professional and does not try to influence the media, unlike bad actors like Russia”.

The reference to Russia is no accident. The OCCRP has received several grants from the U.S. government for research in countries that Washington considers to be ‘priority problems’.

Between 2015 and 2019, the State Department allocated $2.2 million to the OCCRP for a mission called ‘Stabilizing the Russian Media Space’.

Mediapart also pointed out that the OCCRP led an international media study called Russian Asset Tracker from 2021-2022. The project created the largest database of non-state assets of Russian billionaires and personalities.

According to the report, the U.S. government, through the Global Anti-Corruption Consortium (GACC), used the reports produced by the OCCRP as a kind of “weapon”.

The GACC was established in 2016 following a request for proposals from the U.S. Department of State, and the U.S. government is the largest donor. To date, it has transferred a total of $10.8 million to the OCCRP.

The GACC has two main functions: To initiate corruption-related criminal investigations and enforcement actions based on the OCCRP’s findings, and to mobilize civil society and persuade states to strengthen their anti-corruption and anti-money laundering laws.

In May 2024, the OCCRP produced a report on Russian sanctions evasion. The report was produced in collaboration with the U.K. think tank Royal United Services Institute (RUSI) and funded by the U.K. Foreign Office. One of RUSI’s vice presidents is former CIA Director General David Petraeus.

Mediapart wrote that for a journalistic organization to carry out such activities on the initiative and with the financial support of the United States, even in a ‘just cause’, raises important ethical questions.

OCCRP president Sullivan disagreed: “While some initially found this approach controversial, it has been adopted by other media organizations. We believe the GACC has been very successful.”

Continue Reading

DIPLOMACY

Aleppo’s echo in Europe

Published

on

The offensive in Aleppo by the jihadist Hayat Tahrir al-Sham (HTS) and the rapid retreat of the Syrian army are likely to have many consequences. Among them is the alignment of the “rebellious” countries within the EU.

The “rebellion” emerged last summer. Eight EU countries, led by Austria and Italy, sent a letter to EU foreign policy chief Josep Borrell calling for a new chapter in relations with Syria.

Calling on the EU to “review and assess” its approach to Syria, they proposed the creation of an EU-Syria envoy tasked with re-establishing contact with the Syrian ambassador in Brussels and liaising with both Syrian and regional actors.

Other proposals included a strategic dialogue with Arab countries, developing the EU’s approach to Syria’s reconstruction, addressing the “unintended negative effects” of EU sanctions and creating conditions for refugees to return to Syria.

“After 13 years of war, we have to admit that our Syria policy has not improved much,” said Austrian Foreign Minister Alexander Schallenberg at the time.

The fact that Damascus had survived with the help of Iran and Russia and that the Syrian opposition had been dismembered or driven into exile, ‘no matter how painful’, could no longer be ignored by the European Union, the Austrian minister argued.

The new eight-nation peace initiative was based on the abandonment of the EU’s famous ‘three no’s’ and the red line of ‘no peace with the regime of Bashar al-Assad’.

Indeed, Italy decided last July to send an ambassador to Damascus, the first G7 country to do so in years.

In October, Italian Prime Minister Giorgia Meloni told the Italian Senate that the EU should review its strategy on Syria and work with all stakeholders to create the conditions for the voluntary, safe and sustainable return of Syrian refugees to their homes.

Later in November, the Syrian consulate in Italy, which had suspended its activities in 2012 on the basis of ‘reciprocity’, announced the resumption of its services to Syrian nationals in the country.

In October, Austrian Chancellor Karl Nehammer cited the 200,000 people who had crossed from Lebanon into Syria during the ongoing Israeli occupation and attacks as proof that Syria was safe, saying that ‘Syria is now certified as safe in many areas’.

Things went as expected. The EU announced that it would appoint a special envoy to evaluate its Syria policy. The head of the EU delegation to Syria, Michael Ohnmacht, had recently addressed the public in a video filmed in the capital, Damascus.

A spokesperson for the EU foreign ministry told DW that the appointment of a special envoy was being considered, but that it would not mean a change in the EU’s current policy towards Syria. The envoy would report directly to European Commission President Ursula von der Leyen.

Julien Barnes-Dacey, director of the Middle East and North Africa programme at the European Council on Foreign Relations, told DW: “It has been clear for some time that Europe does not have a meaningful Syria strategy. We have fallen into the trap of saying that any engagement means legitimizing the regime, when in many ways it could be seen as a way to help improve the desperate situation on the ground,” Julien Barnes-Dacey, director of the Middle East and North Africa programme at the Council on Foreign Relations, told DW.

Barnes-Dacey argued that if the EU continues to stay out of Syria altogether, it ‘cannot do much to help Syrians struggling to survive under the regime’s boot and cannot hope to compete with countries like Russia and Iran’.

By a strange coincidence, on 26 November, the day before the jihadist assault on Aleppo began, EUObserver published an article by Beder Camus. Mr Camus, who is based in Istanbul, is a member of the ‘opposition’ Syrian National Council and chairman of the Syrian Negotiations Commission.

In a direct appeal to EU countries calling for a change in Syria policy, he argued that without progress in implementing UN Security Council Resolution 2254 and without a political solution, any step towards normalisation with Damascus would ‘undermine the prospects for peace, stability and prosperity’.

“By all estimates, it is clear that Syria is not a safe place for refugees to return to,” the “opposition” leader wrote, adding that according to his own estimates, the Damascus regime currently controls “only about 50 per cent of Syria’s territory and population”, while a significant part of the country continues to suffer from ongoing violence and dire living conditions.

“There are many significant political risks in engaging with the Assad regime, not least that any investment and reconstruction will directly benefit the Assad regime and its network of corrupt officials, businessmen and military personnel,” Camus said.

The HTS attack certainly worked in Europe. After the fall of Aleppo, the country’s second largest city and commercial heartland, one would have expected a change in attitude towards the Assad regime, which controls most of Syria and has made it a safe country.

Cecilia Piccioni, Italy’s ambassador to Moscow, met with Russian foreign ministry officials over Russia’s alleged attack on an Italian charity in Aleppo.

For his part, Foreign Minister Antonio Tajani said on Sunday that Italy was “closely following developments in the crisis and that the Italian embassy in Damascus is in constant contact with citizens (mostly dual nationals) to facilitate their safe evacuation from the city”.

Tajani also said in X that the Russian attack had caused severe damage to the Terra Sancta College and called on all warring parties in Syria to “protect civilians”.

In a later statement, the foreign minister warned of a new migration crisis with the resumption of hostilities in Syria.

“Lebanon is already hosting one million Syrian refugees. There is a risk that a protracted civil war could lead to a new migration crisis,” Tajani said.

Speaking to journalists on the sidelines of an international humanitarian conference on Gaza in Cairo on Monday, Antonio Tajani warned that the conflict could drag on.

Tajani also argued that the conflict, which directly affects Lebanon, could also affect Europe.

It seems that the Aleppo offensive by the jihadists and their foreign backers will also succeed – at least for a while – in silencing the fractured voices in Europe.

Continue Reading

DIPLOMACY

Beijing blocks exports of critical raw materials to the U.S. in retaliation

Published

on

China has announced a ban on exporting critical raw materials such as gallium and germanium to the United States following heightened U.S. pressure on China’s chip industry. This move escalates tensions between the world’s two largest economies and risks further disruptions to global supply chains.

China’s Ministry of Commerce stated on Tuesday that it has tightened export controls on dual-use materials to the U.S., citing the need to “protect national security and interests.” The export of gallium, germanium, antimony, and other superhard materials to the U.S. is now prohibited in principle, according to the ministry’s statement.

This decision comes just hours after the Biden administration imposed its most extensive export controls yet, blacklisting 140 Chinese organizations, including prominent players in the country’s chip-making sector.

The restricted materials—gallium, germanium, antimony, and graphite—are considered “dual-use,” meaning they serve both civilian and military applications. These materials are critical for manufacturing semiconductors, electric vehicles, power systems, and other high-tech equipment.

The U.S. previously identified graphite and gallium as strategic materials in its 2021 supply chain review, highlighting the risks posed by their production being concentrated in China. Notably, China dominates global production of natural graphite, a key component in battery manufacturing.

China’s Ministry of Commerce also stated that no dual-use products would be exported for U.S. military purposes or to U.S. military organizations. This follows a detailed list published last month identifying materials such as tungsten, magnesium, and titanium as subject to strict export controls.

China’s latest restrictions are part of a broader response to what it perceives as the U.S. “weaponizing” export controls. A Ministry of Commerce spokesperson criticized the U.S. for violating international trade rules, harming bilateral interests, and destabilizing global supply chains. The spokesperson warned that any individual or organization violating these export rules would face legal consequences.

In a further sign of growing tension, major Chinese industry associations, including the China Association of Automobile Manufacturers and the China Internet Society, have urged members to exercise caution when procuring U.S. chips. These organizations described American chips as “no longer reliable or safe,” citing arbitrary changes to U.S. trade control measures that disrupt stable supply chains.

Continue Reading

MOST READ

Turkey