Are Chinese Companies Complying With The US’ New Sanctions Against A Russian LNG Project?

Absent official confirmation of those Chinese companies’ decision, the veracity of Kommersant’s claim can only be speculated upon, but it was noteworthy that RT raised awareness of this report among their global audience.

RT reported on Monday that Russia’s reputable business daily Kommersant claimed that “French TotalEnergies, Chinese CNOOC and China National Petroleum Corp (CNPC), and a consortium of Japanese Mitsui and JOGMEC declared force majeure on their participation” in Russia’s Arctic LNG 2 project. This decision was allegedly in response to new US sanctions from early November “banning third countries in Asia and Europe from purchasing LNG produced by the plant when it starts operating in 2024.”

Chinese Foreign Ministry spokeswoman Mao Ning was asked about this the day after on Tuesday, to which she responded as follows according to the ministry’s official transcript of her press conference:

“China and Russia conduct normal economic and trade cooperation on the basis of mutual respect, equality and mutual benefit. Such cooperation should not become the target of any intervention or restriction by a third party.

What has happened shows that sanction and pressuring does not serve to achieve anything but can only cause negative spillover.

We oppose unilateral sanctions and long-arm jurisdiction that lack basis in international law and UN Security Council mandate. China and Russia will remain committed to normal economic and trade cooperation based on mutual respect, equality and mutual benefit.”

As can be seen, while she condemned unilateral sanctions and defended Chinese-Russian trade in consonance with her country’s consistent position, she nevertheless didn’t deny that report.

Absent official confirmation of those Chinese companies’ decision, the veracity of Kommersant’s claim can only be speculated upon, but it was noteworthy that RT raised awareness of this report among their global audience. This in turn hints that there’s some truth to those two complying with the US’ new sanctions against a Russian LNG project. The structural reasons for why they might be doing so were addressed in this analysis here from September 2022 that was written on this general subject.

To summarize, China’s export-driven economy remains in a relationship of complex economic interdependence with the US, which makes Beijing reluctant to risk secondary sanctions against its companies and any further escalation of their trade war that’s largely stabilized over the past few years. These concerns are especially sensitive nowadays after the latest Xi-Biden Summit in mid-November led to an incipient thaw in their ties, which the People’s Republic is seriously committed to maintaining.

The US is equally serious about it too as suggested by the curious worsening of ties with India in the weeks after that aforesaid event, which these analyses here and here assessed to be a signal showing Washington’s commitment to resuming talks on a New Détente with China. If that’s indeed the case, then it would therefore follow that the US might also request similar such proof of commitment from China as a reciprocal “goodwill gesture”, ergo its informal compliance with the latest sanctions.

This would explain why Mao condemned these sanctions and defended Chinese-Russian trade but conspicuously didn’t deny Kommersant’s report that RT amplified on their website. In other words, while Indo-US and Sino-Russo ties still maintain their strategic substance, the US and China might have requested tacit concessions from the other’s partnership with their rival in exchange for taking their thaw to the next level. As this process apparently unfolds, Russian-Indian relations have strengthened.

The timing of External Affairs Minister Dr. Subrahmanyam Jaishankar’s seemingly impromptu ongoing five-day trip to Moscow in the last week of the year, the strategic importance of which was analyzed here and here, shows that both understand the need to expand relations as much as possible in this context. India’s top diplomat himself praised their ties as “exceptional” when addressing the Russian-based diaspora and noted that they’ve been the “one constant in world politics” “for 70-80 odd years”.

Those who’d like to learn more about India and Russia’s complementary balancing acts, especially vis-à-vis China, should reference these analyses here and here since it’s beyond the scope of the present one. The purpose in drawing attention to this is to inform the reader that China’s reported compliance with the latest US sanctions, which might have been done as a “goodwill gesture” to aimed at advancing the greater good of its incipient thaw with Washington as Beijing sees it, is already being balanced out.

The same goes for the latest trouble in Indo-US ties, which altogether confirms the multipolar nature of International Relations since it shows that all key actors in the global systemic transition actively attempt to balance one another whenever one of them takes certain steps towards or away from others. Accordingly, while the US might dislike India’s outreaches towards Russia just like Russia might dislike China’s reported compliance with the new sanctions, each nevertheless accepts and understands it.

Neither of these four moves – the incipient Sino-US thaw, the subsequent worsening of Indo-US ties, Chian reportedly complying with the US’ new anti-Russian sanctions, and the latest strengthening of Russian-Indian relations – has irreparably upset the geopolitical balance in the world. They’re all unfolding in sequence and none of them is a game changer, at least not yet, with the end result being that the international equilibrium remains and multipolarity therefore continues marching on.