China cannot offset Western sanctions on Russia

Significance

It has also denied engaging in discussions with Moscow about providing military assistance, a claim the US government has made to allied nations.

Impacts

• Most Chinese firms lack commercial incentives to risk secondary sanctions by doing business with Russia.
• Beijing will monitor events closely to learn lessons about mitigating a potential economic embargo of similar scope against itself.
• China will accelerate efforts to raise technological self-reliance and develop means to respond to potential sanctions.
• China will redouble efforts to diversify away from reliance on the dollar and economic chokepoints such as the SWIFT system.