The situation between the United States (US) and China may escalate further as the US considers dropping a new "bomb" on Chinese companies. According to CNBC International, the proposal comes from the US Congress, with lawmakers considering the plan, referring to similar actions taken by the European Union (EU) over the weekend.
They accuse Chinese companies of aiding Russia in the war with Ukraine. This marks the first direct attack Washington has aimed at Beijing since the war began nearly two years ago.
"China must understand that the same type of sanctions that have begun to take effect in Russia and impact productivity, economic performance, and quality of life in Russia, can also be applied to China," said Democratic Senator Gerald Connolly, a member of the US House Foreign Affairs Committee, quoted on Tuesday (20/2/2024).
"And frankly, China has more to lose than Russia," he added.
Indeed, US sanctions are believed to be highly damaging to China's already sluggish economy, following slower-than-expected Covid-19 recovery and turmoil in the real estate sector. However, such a step could also harm the US, given the interdependence of trade between the two countries.
Nevertheless, Connolly said this would not deter punishment against President Xi Jinping's nation. He stressed that it might happen "soon."
"My hope is that the biggest threat and the fact that European countries are really serious about this, which is a relatively new development. (So) I hope it will clarify some thinking to Beijing," he said.
"If broad sanctions are applied to China, it will have a significant impact. And their economy is currently weak. So I hope China will carefully consider that there are consequences for supporting violence and turmoil in Russia in Ukraine," he added.
Another US Senator also confirmed this. Ben Cardin said the US Congress is currently considering options with President Joe Biden's administration.
"This is an area we are considering, and Congress is working with the government on how we can enforce sanctions against Russia, and this requires greater cooperation from other countries," he said.
"China's threat is a big concern for the US," he added.
Previously, the EU announced it was preparing to impose sanctions on Chinese companies believed to be aiding Russia in avoiding Western penalties. This is intended to curb its war in Ukraine.
The proposal, which would be part of the bloc's 13th sanction package since Russia's large-scale invasion began, is likely to be ready by the end of this month. EU's top diplomat Josep Borrell said the plan is becoming increasingly urgent following the death of Russian opposition leader Alexei Navalny on Friday.
The plan comes amid circulating reports that Beijing is indeed supporting Moscow's war economy.
A CNBC International investigation in September found that Chinese companies played a crucial role in enhancing Russia's military capabilities, including through trading goods for use on the battlefield in Ukraine.
A separate report in January also claimed to have found that China has been a major conduit for channeling crucial Western technology to Russia. Unfortunately, there has been no response from China regarding this matter.