EU to tell Beijing of plan to blacklist more Chinese businesses for breaching Russia sanctions

Purpose is to enlist China’s help in ending the companies’ activities that allegedly violate sanctions on supplying products with military applications to Moscow
Discussion will come as a series of events this week, from charges of espionage and hacking to raids on businesses seeking proof of state subsidies, pressure bilateral ties

China-EU relations

Finbarr Berminghamin Brussels

Published: 12:25pm, 26 Apr 2024

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European Union officials plan to inform Chinese diplomats on Friday about the intent to add more Chinese companies to a blacklist because they had helped Russia evade EU sanctions.

The Chinese companies stand accused of buying European-made goods that are not permitted to be sold to Russia, then exporting them to Russian military buyers.

The aim of the meeting is to enlist Beijing’s help in closing the loopholes, people familiar with the planning said.

Previous consultations like this have resulted in the removal of Chinese firms from a draft blacklist before it got published, after Beijing committed to stopping the trade.

Fu Cong, now China’s permanent representative to the United Nations, had been involved in similar consultations when he was Beijing’s ambassador to the EU. Photo: AP

Those earlier talks came after a frantic bout of lobbying in Brussels by Fu Cong, then the Chinese ambassador to the EU, who recently took up a new post at the United Nations in New York. Fu has yet to be replaced in Brussels.

Even so, three mainland Chinese entities and one registered in Hong Kong were blacklisted in February for flouting EU sanctions, as part of the bloc’s 13th package of punitive measures to hobble Russia’s military.

The latest salvo comes as Brussels readies its 14th package. The Chinese entities form part of a broader group of companies that also include some from Hong Kong. Bloomberg first reported on the latest list, saying that the firms from China have “provided Russia with satellite images and other technologies”.

China’s supplying of dual-use goods – products that have military applications – to Russia has been a cause for concern in Europe, as the West looks to support Ukraine on the battlefield. Beijing says it is neutral in the war, now in its third year, but Brussels broadly considers it to have sided with Moscow.

In Berlin on Thursday, Nato Secretary General Jens Stoltenberg accused China of “propping up Russia’s war economy”.

“Last year, Russia imported 90 per cent of its microelectronics from China, used to produce missiles, tanks, and aircraft. China is also working to provide Russia with improved satellite capabilities and imagery. All of this helps Moscow to inflict more death and destruction on Ukraine,” Stoltenberg said.

Even apart from Ukraine, Friday’s meeting would come at a testy time for EU-China relations, with a series of explosive events piling pressure on bilateral ties all week.

On Tuesday, EU officials spearheaded dramatic raids on the local offices of Chinese surveillance kit maker Nuctech in Warsaw and Rotterdam.

Nuctech raids send shock waves through EU amid fears of crackdown on China firms

Officers sought evidence of state subsidies from Beijing, as part of a preliminary investigation under the new EU foreign subsidies regulation. A pipeline of cases is believed to be coming under this tool in the months ahead.

A separate EU trade probe was launched on Wednesday into market access for EU firms into China’s vast medical devices sector. This was the first case begun under the bloc’s international procurement instrument, intended to pry open public tenders outside Europe that are closed to EU operators.

Also this week, four German nationals were arrested for allegedly spying for Chinese secret services, including an assistant employed by a high-profile member of the European Parliament.

Jian Guo, an accredited assistant to far-right politician Maximilian Krah, was detained in Germany on Tuesday. A day later, Krah confirmed that authorities have also begun an inquiry into him.

Maximilian Krah, of the German far-right Alternative for Germany party, said he is being investigated after an assistant was arrested for spying. Photo: AP

On Thursday, Patricia Flor, Germany’s ambassador to China, posted on X, formerly known as Twitter, that she had been summoned by the Chinese foreign ministry to discuss the arrests.

Also on Thursday, the Belgian foreign ministry called in the Chinese ambassador after local media reported that Els Van Hoof, chair of the country’s Foreign Affairs Committee, has been hacked by China.

“Members of Parliament must be able to work freely. That is the basis of our democracy,” Foreign Minister Hadja Lahbib wrote on X. “Following recent reports of intimidation and hacking of Belgian parliamentarians, the Chinese ambassador will be summoned.”

All these topics are expected to be discussed on Monday, when Executive Vice-Minister of Foreign Affairs Ma Zhaoxu comes to Brussels for talks with EU officials, sources told the South China Morning Post.

They will also no doubt be on the agenda when Chinese President Xi Jinping touches down in Paris the following weekend. Xi is expected in the French capital for talks with his counterpart Emmanuel Macron from May 5 to 7, according to media reports.

Hungarian media reported on Thursday that Xi would also travel to Budapest for talks with Prime Minster Viktor Orban from May 8 to 10. He is also expected to visit the Serbian capital of Belgrade.