Finance Minister Janet L. Yellen called on China on Wednesday to persuade Russia to end its war in Ukraine and warned that staying out could jeopardize China’s position in the world economy.
She spoke amid growing frustration with the United States and its allies that China refuses to condemn Russia’s actions in Ukraine. Instead, the two sides strengthened “special relations”. The United States is worried about whether China will help Russia avoid sanctions and stabilize its economy.
“In the future, it will be increasingly difficult to separate economic issues from broader national interests, including national security,” Ms. Yellen told the Atlantic Council, a think tank. “The world’s attitude towards China and its readiness to accept further economic integration may be influenced by China’s response to our call for decisive action against Russia.
Ms. Yellen added that Russia’s actions contradicted China’s longstanding public commitment to sovereignty and territorial integrity, and called on China to use its influence over Russia to end the war.
Eswar Prasad, a former director of the International Monetary Fund for China, said the United States was trying to put China in place with Ms. Yellen’s comments.
“The United States calls the Chinese government’s bluff trying to have it in both directions, claiming to be a defender of the global system of government while standing aside, as this system is caused by Russia’s naked aggression in Ukraine.” said mr. Prasad, Professor of International Trade Policy at Cornell University.
Ms. Yellen also said the effects of Russia’s invasion of Ukraine cast a shadow over the global economy after two years of pandemic disruption, but she insisted the United States and its allies would continue to work together to confront Russia with grueling sanctions.
“The war between Russia and Ukraine has redrawn the contours of the world economic perspective,” Ms. Yellen said.
She spoke ahead of spring meetings between the World Bank and the International Monetary Fund next week, when finance ministers from around the world will meet in Washington. After two years of blockages and supply chain disruptions, these officials are now absorbed in coordinating sanctions in a bid to cripple Russia’s economy while helping their own countries cope with rising inflation.
In her speech, Ms. Yellen highlighted countries such as China and India, which continue to engage with Russia despite the global response to the atrocities it has committed in Ukraine.
The Russia-Ukraine war and the global economy
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Lack of base metals. The price of palladium, used in car exhaust systems and mobile phones, is rising amid fears that Russia, the world’s largest metal exporter, could be cut off from global markets. The price of nickel, another key Russian export, is also rising.
Financial turmoil. Global banks are preparing for the effects of sanctions designed to limit Russia’s access to foreign capital and limit its ability to process payments in dollars, euros and other currencies that are crucial to trade. Banks are also on the lookout for retaliatory cyber attacks from Russia.
“Let me now say a few words to those countries that are currently sitting on the fence, perhaps seeing an opportunity to win by maintaining relations with Russia and filling the void left by others,” Ms. Yellen said. “Such motivations are short-sighted.”
“And let’s be clear: a united coalition of sanctioning states will not remain indifferent to actions that undermine the sanctions we have imposed,” she continued.
The United States and its allies in Europe and Asia have imposed sanctions on Russia’s central bank, its top financial institutions and its military supply chain. There is growing pressure to impose sanctions on the Russian energy industry, and some argue that the United States should consider “secondary sanctions” for countries that do not comply with the restrictions imposed by the Biden administration on transactions.
Referring to Russian President Vladimir Putin, Yellen said the United States did not intend to stop its efforts to stifle Russia’s economy, saying: “Rest assured until Putin puts an end to his heinous election war.” The Biden administration will work with our partners to push Russia into economic, financial and strategic isolation.
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