China Rejects US Calls to Impose Sanction on Russia

China's foreign ministry has rejected calls from the US to place sanctions on Russia's economy.

In an interview with Lithuanian news outlet Alfa, Daniel Fried, the US co-ordinator for sanctions policy said that the government has already lobbied East Asian countries such as South Korea to follow suit regarding sanctions and that it is in "consultation" with China.

China's response to the call was muted. A spokesperson for the foreign ministry told Russia's ITAR-TASS: "The Ukrainian crisis requires a political solution. In a real situation, sanctions do not solve the problem; on the contrary, they might cause new problems which do not meet the interests of all sides and the initial intention to resolve the crisis.

"China calls upon all the parties to keep calm and exercise restraint, helping to promote peace talks, seek a political solution of the existing problems, and avoid the actions fraught with aggravation of contradictions and escalation of tensions, in order to ensure peace and stability in the region."

Previously China has intimated that it does not believe in the efficacy of sanctions, with official news channels also publishing doubts as to whether Russia was responsible for downing Malaysia Airlines flight MH17, the event which ushered in stricter sanctions.

A contemporaneous editorial in the Global Times read: "The Western rush to judge Russia is not based on evidence or logic. Russia had no motive to bring down MH17; doing so would only narrow its political and moral space to operate in the Ukrainian crisis. The tragedy has no political benefit for Ukrainian rebel forces, either.

"Russia has been back-footed, forced into a passive stance by Western reaction. It is yet another example of the power of Western opinion as a political tool."

Business in China has slowed in recent weeks. This week's China manufacturing PMI from Markit and HSBC fell to 50.3 in August from July's 18-month high of 51.7, with analysts attributing some blame to the uncertainty shrouding the global economy, because of events in Russia and Ukraine.

Earlier this week, the US lobbied Japan to impose sanctions on Russia, which seems a more realistic prospect than China, since Russia has been making real ground it its efforts to bolster trade ties with China.

In May, Russia's state-owned gas utility Gazprom signed a $30bn deal to provide natural gas to China for 30 years, as it sought to diversify its trade routes away from Europe.

To date, Japan's action over the East Ukraine crisis has focused on individuals rather than the Russian economy.

A US Treasury spokesperson is quoted as saying: "There's a strongly shared commitment that all of our banks and businesses need to be working together to ensure that maximum pressures are brought to bear on Russia."

Japan relies on Russia for the import of natural resources. The country is decommissioning its nuclear facilities, following the Fukashima disaster, and gas has predominantly replaced nuclear in its energy mix.

Russia is now Japan's fourth-largest supplier of gas and fifth-largest provider of crude oil. Recently, Japanese officials have spoken of their desire to provide high-tech equipment and engineering to Russia as it seeks to develop its energy sector.

The relationship has soured in the aftermath of even the slightest Japanese sanctioning of Russia. Today (22 August), officials in Moscow presented the Japanese ambassador with a list of Japanese citizens that are now barred from entering Russia.