The situation between the United States (US) and China is potentially heating up as the US considers dropping a new "bomb" on Chinese companies. According to CNBC International, the proposal comes from the US House of Representatives, with lawmakers considering the plan, citing 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 Washington's first direct attack on Beijing since the war began nearly two years ago.
"China must understand that the same type of sanctions that have come into effect in Russia and have affected productivity, economic performance, and the 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.
While US sanctions are believed to potentially severely harm China's ailing economy, following slower-than-expected recovery from Covid-19 and turmoil in the real estate sector, such a move could also hurt the US, given the interdependence in trade between the two countries.
However, Connolly said this wouldn't deter punishment to President Xi Jinping's nation. He stressed that it might happen "soon."
"My hope is that the greatest threat and the fact that European countries are really serious about this, which is a relatively new development. So I hope to convey some thoughts to Beijing," he said.
"If broad sanctions are applied to China, it will have a huge impact. And their economic performance is currently weak. So I hope China will carefully consider that there are consequences for supporting violence and Russia's wrongdoing 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're 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 major concern for the US," he added.
Earlier, the EU announced it was preparing to impose sanctions on Chinese companies believed to be helping Russia evade Western sanctions, intending to curb its war in Ukraine.
The proposal, which will be part of the bloc's 13th round of sanctions since Russia's massive invasion began, is likely to be ready later this month. EU's top diplomat Josep Borrell said the plan became increasingly urgent after 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.
CNBC International's 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 in channeling crucial Western technology to Russia. Unfortunately, there has been no response from China regarding this.