This week, the bloc’s 27 member states will be asked to approve the listing of three mainland Chinese entities, along with another based in Hong Kong, as part of its 13th package of sanctions on Russia, almost two years into the war, according to diplomatic sources.
Bloomberg reported that most of the two dozen companies on the proposed list are technology and electronics companies accused of “contributing to Russia’s military and technological enhancement or to the development of Russia’s defence and security sector”.
The four companies were named as mainland China-based Guangzhou Ausay Technology Co Limited, Shenzhen Biguang Trading Co Limited, Yilufa Electronics Limited, and the Hong Kong-based RG Solutions Limited in a report by Washington-backed Radio Free Europe/Radio Liberty.
Companies from India, Serbia and Turkey will also be listed, according to Bloomberg.
It would mark the first time Chinese companies have been officially listed, although Brussels has considered targeting entities from the country before.
Last year, it negotiated the removal of five Chinese entities from a package of sanctions after assurances from Beijing that the practice would stop.
Previously, powerful member states including France and Germany have opposed the listing of Chinese firms on the EU’s blacklist – known as Annex IV – without due consultation with Beijing.
There were fears that listing Chinese firms could result in reprisals against European businesses active in China, and further sour bilateral ties.
In talks with Chinese President Xi Jinping in December, the EU’s leadership raised specific Chinese companies that the bloc claimed were circumventing sanctions by allowing Russia’s military -industrial complex to access dual-use goods made in Europe.
At these discussions, Xi said Beijing would retaliate if the EU sanctioned Chinese companies.
Should the companies be listed, EU entities would be banned from doing business with them.
Sanctions must be approved by all 27 EU member states before being adopted. The decision will go before a meeting of ambassadors on Wednesday.
In May of last year, the EU proposed imposing restrictions on mainland Chinese and Hong Kong firms for allegedly aiding Russia’s war machine, but the measure did not receive the approval of all EU members.
Responding to that move, Beijing urged Brussels to avoid taking the “wrong path” and warned it would take firm action to safeguard its rights and interests.
“China opposes actions that use China-Russia cooperation as a pretext to impose illegal sanctions or long-arm jurisdiction against China,” Chinese foreign ministry spokesman Wang Wenbin said in May.
Beijing also assured Brussels that it was not involved in Russia’s military actions in Ukraine.
Unlike much of the West, Beijing has not condemned Moscow since the Ukraine crisis started two years ago, and it does not officially call the conflict a “war” or an “invasion”.
But Beijing holds the position that “the sovereignty and territorial integrity of all countries” must be respected and has frequently offered to help mediate the conflict.
In his call with Putin on Thursday, Xi spoke highly of the bilateral relations and vowed to deepen cooperation between the two countries.
The two leaders also agreed to defend their sovereignty, security, and development interests and “resolutely oppose interference in their internal affairs by external forces”.
China is a key player in Russia’s economy in the face of sanctions imposed by the United States and the EU. Trade value between China and Russia reached the US$200 billion target and even hit a record US$230 billion for 2023, Putin said at the annual Results of the Year news conference in December.
China has been among the top buyers of Russian coal and oil since the EU imposed sanctions in 2022, according to the Finland-based Centre for Research on Energy and Clean Air.
However, despite facing challenges, China’s relations with major EU economies such as Germany and France have shown signs of improvement.
Xi will reportedly travel to France in his first post-pandemic trip to Europe this spring, although neither side has confirmed the visit. China and France will celebrate the 60th anniversary of the establishment of diplomatic ties this year.
Additionally, German Chancellor Olaf Scholz will travel to China with a business delegation from April 15 to 16.
Late last year, China made short visits visa-free for travellers from France, Germany, Italy, the Netherlands and Spain. Beijing extended the visa-free policy to Ireland and non-EU member Switzerland during Premier Li Qiang’s trip to the two countries last month.