Yellen warns of "significant consequences" if Chinese firms help Russia’s war in Ukraine

There will be "significant consequences" for China if its companies "support Russia's war against Ukraine," US Treasury Secretary Janet Yellen warned on April 6.

Yellen's statement following talks in Guangzhou came after US Secretary of State Antony Blinken said on Thursday at NATO headquarters in Brussels that "China continues to provide materials to support Russia's defence industrial base."

During her meetings with local authorities and in a bilateral with Chinese Vice Premier He Lifeng, Yellen "emphasised that companies, including those in the PRC [People's Republic of China], must not provide material support for Russia's war against Ukraine, including support to the Russian defence industrial base, and the significant consequences if they do so," POLITICO reports citing a statement cited by AFP.

"We've been clear with China that we see Russia as gaining support from goods that China, Chinese firms are supplying to Russia," Yellen told journalists in Guangzhou.

"Neither of us want this to be an issue with our bilateral relationship. So we're working together," she added.

Since Russia's invasion of Ukraine began, Beijing's ties with Moscow have become even stronger than before the conflict, with trade between the two countries more than doubling from $108 billion in 2020 to $240 billion in 2023 — making Russia China's 10th-largest trading partner last year.

China is also trying to expand its market share of goods shipped to Europe and the US — so Beijing has an interest in maintaining good relations with the West too. But the US is increasingly worried about the cheap electric vehicles, batteries and other technologies flooding the American market despite Washington's subsidies to its own industry, which is suffering from the Chinese competition.

Yellen's talks in China on Friday and Saturday were held to "facilitate a discussion around macroeconomic imbalances, including their connection to overcapacity," Yellen said in a statement. "I intend to use this opportunity to advocate for a level playing field for American workers and firms," she added.

Xie Feng, China's ambassador to the US, responded that the claim of overcapacity is "untenable" because "globally, high-quality industrial capacity and new-quality productive forces are not excessive, but in dire scarcity," he said in a post on X defining it as "a good thing" that China "can help the international community attain the United Nations 2030 Agenda for Sustainable Development and Paris Agreement goals."