• The US has warned its allies that China is providing geospatial intelligence to Russia.

• China and Russia have grown closer in recent years after declaring a 'no limits' friendship in 2022.

• The US warned of "significant consequences" should Chinese companies support Russia's war effort.

The US has warned its allies of China's growing technological assistance to Russia's war effort against Ukraine.

As the two countries' military collaboration strengthens, China is providing Russia with geospatial satellite imagery for military use.

The news comes a month after a report by the London-based Royal United Services Institute (RUSI) warned that Russia was increasing its cooperation with China in 5G and satellite technology.

Geospatial intelligence integrates data from a network of technologies, ranging from satellites to mobile sensors, ground-control stations, and aerial images. The data is then used to produce real-time maps and simulations to help identify military threats, according to the European Union Satellite Centre.

China's assistance also includes support microelectronics and machine tools for tank production, optics, missile fuels, and greater space cooperation, according to sources familiar with the matter interviewed by Bloomberg.

Satellite imagery has played a critical role for both sides of the war in Ukraine.

In October 2022, Russia said commercial satellites used by the United States to assist Ukraine in its war against Russia were "legitimate" targets for attacks.

Private assets like Elon Musk's Starlink satellite terminals and Maxar and Planet Labs earth observation satellites have proven critical in keeping Ukrainians online.

In recent months, however, Ukraine has criticized Musk for failing to prevent Russia from using the Starlink terminals in Russia-occupied regions of Ukraine.

Beijing's "no limit" relationship with Moscow

Chinese Premier Xi Jinping and Russian President Vladimir Putin referred to their reciprocal relationship in 2022 as a "no limits" friendship.

According to Chinese customs data, trade between the two countries reached a high of $240 billion in 2023, with China becoming one of Russia's largest goods suppliers since Western companies left the Russian market after the country's 2022 invasion of Ukraine.

China has also supplied Moscow with access to restricted "dual-use" goods, such as chips and integrated circuits, which can be used to produce weapons.

In return, Russia has exported large quantities of oil and coal to its neighbor, at discounted prices.

This time last year, China's Ambassador to the European Union Fu Cong downplayed the Russo-Chinese partnership in an interview with The New York Times.

Despite China's refusal to denounce the Russian aggression against Ukraine, Fu said at the time that his homeland was not on Russia's side of the war, adding that the relationship between Beijing and Moscow has been "deliberately misinterpreted."

But China's support for Russia has only grown in recent months, Bloomberg's sources said.

The Financial Times reported this week that US Secretary of State Antony Blinken had briefed European allies on the extent of China's aid to Russia and the need to do more to prevent it. Blinken reportedly asked allies to raise the issue with China directly.

US Treasury Secretary Janet Yellen also warned of "significant consequences" this week should companies, including those in China, provide support to Russia that would help it wage war against Ukraine.

"We've been clear with China that we see Russia as gaining support from goods that Chinese firms are supplying to Russia," Yellen said on Saturday.

"On their side, China emphasized that it is their policy not to provide Russia with military support — neither of us wants this to be an issue with our bilateral relationship."

During a recent call, US President Joe Biden expressed his concerns directly to his Chinese counterpart regarding China's assistance to the Russian defense sector.

The call between Biden and Xi was the first one-on-one communication between the two leaders since they met in California in November last year when they agreed "to keep up more regular communications."

China sending Russia ‘rifle scopes, tank parts and rocket fuel’

Special operations scouts conduct a live firing drill in Fangchenggang, Guangxi Province, China -

China has ramped up support for the Kremlin’s war in Ukraine by sending rifle scopes, tank components, rocket fuel and satellite images to Russia, US officials have said.

Their warning came on the eve of a two-day mission to China by Russian foreign minister Sergei Lavrov to discuss the Ukraine war.

US officials told Bloomberg on condition of anonymity that Antony Blinken, US secretary of state, briefed European allies this week on China’s increased support for Russia.

They also said that China was sending microelectronics, propellants used in missile production and turbojet engines to Russia, sidestepping Western sanctions.

Vladimir Putin has courted China heavily since his invasion but Beijing has appeared reluctant to be seen propping up his military. Now, with Russia taking ground in eastern Ukraine, that appears to have changed.

Russia is outgunning Ukrainian forces across the front lines because the West has struggled to supply promised ammunition. By contrast, the Kremlin has switched consumer-based factories to arms manufacturing and signed deals with Iran and North Korea for supplies of drones and artillery shells.

 

Analysts said China may have moved to a policy of quietly supporting the Kremlin’s war machine because it now views Russia as having the upper hand.

“Beijing doesn’t give arms because it fears US secondary sanctions and wants to develop EU relations, but still silently supplies machinery that’s important for Russia to sustain its arms production,” said Carl Bildt, co-chair of the European Council on Foreign Relations think tank and a former Swedish prime minister.

The Kremlin has previously said that Putin plans to visit China in May. On a trip to Moscow last year, Putin and Chinese leader Xi Jinping declared a “no limits” partnership.

US-led sanctions on Russia have hit the Kremlin’s industrial base but they have also been more leaky than planners had hoped.

One of the main gateways for products into Russia is through former Soviet states in Central Asia and the South Caucasus, which buy products from the West and then sell them on to Russia, but Hong Kong has also become an important route for vital microchips.

The US has already slapped secondary sanctions on several Chinese companies and Janet Yellen, US treasury secretary, has warned China of the “significant consequences” of backing Putin.

“We’ve been clear with China that we see Russia as gaining support from goods that China, Chinese firms are supplying to Russia,” she said during a trip to Guangzhou.

But Jessica Berlin, a non-resident fellow at the Centre for European Policy Analysis think tank, said that China may have heard this warning too many times and decided that it’s hollow.

“They’ve observed the US response to smaller, discrete support for Russia for two years and conclude that they have little to no consequences to fear,” she said.

Since Europe cut ties with Russia over its invasion of Ukraine in February 2022, the Kremlin has increasingly looked to China as its main economic partner.

China is Russia’s largest gas client and the Russian Central Bank now keeps most of its international reserves in yuan. It said that last year the yuan became the most traded currency in Russia, whereas before the war it had barely been used. It has also encouraged currency swaps with China to outmanoeuvre Western financial sanctions.