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Ukraine update: Biden to warn China against supporting Russia

Oil rose after the Kremlin pushed back against reports of progress in peace talks.
Image: Bloomberg

President Joe Biden will tell his Chinese counterpart Xi Jinping the US will “impose costs” if Beijing backs Russia, in a call to discuss the war that is planned for 9 a.m. Washington time Friday, Secretary of State Antony Blinken said.

Ukrainian officials said Russian strikes on infrastructure and residential areas continued, and in the southern city of Mariupol local authorities described the situation as “critical.” The country’s biggest utility said 1.3 million people were without power.

Oil rose after the Kremlin pushed back against reports of progress in peace talks. The US House of Representatives voted to end regular trade relations with Russia, and the Pentagon warned that Russia may become more reliant on its nuclear deterrent as war and sanctions weaken its conventional forces.

Key Developments

  • Biden Team Hardens View of China Tilting Toward Putin on Ukraine
  • Putin Is Likely to Make Nuclear Threats If War Drags, US Says
  • House Votes to End Russia’s Favored Trade Status With US
  • War Handcuffs Russian Central Bankers Watching Demise of Economy
  • Russia’s War in Ukraine Is Choking Flow of World’s Commodities

All times CET

Tokyo Poised to Receive Ukrainian Refugees (7 a.m.)

Tokyo is set to welcome and provide apartments for its first Ukrainian refugees, Governor Yuriko Koike said in an interview with Bloomberg Television.

Prime Minister Fumio Kishida, whose government has been quick to show solidarity with the U.S. and Europe by imposing sanctions on Russia, has set up a task force to coordinate offers from local governments to host refugees.

Sunak Warns on Economic Hit From Oil Ban (6:32 a.m.)

UK Chancellor of the Exchequer Rishi Sunak estimated that an immediate EU-wide ban on Russian oil and gas imports would result in a hit to the economy of 70-75 billion pounds, the Financial Times reported, citing unidentified officials.

Sunak, who made the comments in a cabinet meeting last week, said an immediate total EU ban would tip economies across Europe into recession, including the UK.

China Ramps Up Purchases of US Corn (6:27 a.m.)

China scooped up 200 000 tons of US corn last week for shipment in the season beginning September 1, Department of Agriculture data showed, the most since December. China was only the fourth-largest buyer for the week, but the sale was notable since the Asian country had been getting supplies from Ukraine.

Russia’s invasion has snarled grain exports and put spring plantings in doubt, pushing prices higher in Chicago.

German Vice Chancellor ‘Would Go to Kyiv’ (6 a.m.)

German Vice Chancellor Robert Habeck said he would be prepared to follow some eastern European leaders and travel to Kyiv to demonstrate support for Ukraine.

“If it made a contribution, I would always go,” Habeck, a member of the Greens party who is also the economy minister, said in an interview with public broadcaster ZDF. The prime ministers of Poland, the Czech Republic and Slovenia traveled to the besieged Ukrainian capital on Tuesday to meet President Volodymyr Zelenskiy.

Handcuffed Russian Central Bank to Meet (6 a.m.)

Russia’s central bank is set to keep the benchmark at the highest in almost two decades when it meets Friday, according to all but five of the 31 economists surveyed by Bloomberg, following an emergency hike that more than doubled the key rate to 20%.

The meeting comes amid an economic drama playing out across the world’s biggest country, which has suffered from sweeping sanctions, the seizure of an estimated two-thirds of its $643 billion in foreign reserves, food shortages and a dash for the exits by foreign companies.

Asia Stocks Retreat, Oil Extends Advance (3:55 a.m.)

Stocks in Asia and U.S. equity futures slipped Friday as a rally in Chinese tech shares fizzled and oil jumped further above $100 a barrel. S&P 500 and Nasdaq 100 contracts fell after the best three-day rally in U.S. stocks since 2020.

China, Russia Officials Discuss Ties (3:42 a.m.)

Russia’s ambassador to China, Andrey Denisov, met Chinese Foreign Ministry official Cheng Guoping on Thursday, the ministry in Beijing said. The two exchanged views on their nations’ relationship, but there were no further details.

China has been struggling to balance its close diplomatic partnership with its neighbor, and their shared opposition to US dominance, with its long-professed support for protecting the sovereignty of independent nations.

Japan, Australia Both Expand Sanctions (2:55 a.m.)

Japan added 15 individuals to its list of sanctions subject to asset freeze, including eight deputy defense ministers. It also hit nine entities including aircraft refueling services firm Rosneft Aero with punishments.

The Australian government announced sanctions on oligarchs Oleg Deripaska and Viktor Vekselberg, who both do business in the country. Foreign Minister Marise Payne said the new measures will target 11 Russian banks and government entities, including the Russian National Wealth Fund and the Ministry of Finance.

Zelenskiy Praises US for Latest Military Aid (12:25 a.m.)

Ukrainian President Volodymyr Zelenskiy praised the latest wave of military assistance from the US and declined to provide details of his country’s negotiating tactics with Russia.

Zelenskiy, in his nightly video address, also said a government lending program would provide companies as much as 60 million hryvnia, or $2 million. The loans would be zero-interest until one month after the end of the war. Then, the annual interest rate would be set at 5%, he added.

S&P Says Russia Debt ‘Highly Vulnerable to Nonpayment’ (10:45 p.m.)

S&P Global Ratings said Russian debt is “highly vulnerable to nonpayment” as it cut the country’s rating to CC, two steps above default.

Earlier Thursday, reports suggested that interest payments due this week on Russian government dollar bonds may be moving forward. JPMorgan Chase & Co., the correspondent bank used by Russia, has processed funds earmarked for the payments and sent the money on to Citigroup Inc. which is acting as payment agent, according to people familiar with the matter. Representatives for JPMorgan and Citigroup declined to comment.

Pentagon Says Putin May Threaten to Use Nuclear Weapons (9:40 p.m.)

President Vladimir Putin can be expected to brandish threats to use nuclear weapons against the West, as the war in Ukraine and its economic consequences weaken Russia’s conventional military strength over time, according to the Pentagon’s Defense Intelligence Agency.

“Russia likely will increasingly rely on its nuclear deterrent to signal the West and project strength to its internal and external audiences,” according to a new DIA assessment prepared for the House Armed Services Committee.

WHO Chief Says 43 Health Facilities Attacked (8:42 p.m.)

The head of the World Health Organization said there have been 43 confirmed attacks on health-care facilities in Ukraine since Russia’s invasion began and aid convoys have been stalled.

Dr. Tedros Ghebreyesus told the United Nations Security Council that aid shipments to the cities of Sumy and Mariupol, surrounded by Russian forces, have been stymied. At least eight facilities that produce oxygen for health facilities have been closed because of the war, he added. Disease outbreaks are expected as the conflict continues.

US House Votes to End Russia’s Favoured Trade Status (8:36 p.m.)

The US House of Representatives voted overwhelmingly to end regular trade relations with Russia in a move that would allow the US to sharply raise tariffs on Russian goods entering the country.

The bill, passed 424-8, would end what’s known as Most Favoured Nation status for Russia, putting it in a category with other pariah states like North Korea and Cuba. The legislation would allow the US to hit Russia with significantly higher tariffs than those it applies to other World Trade Organisation members.

Biden Will Press Xi Not to Back Putin’s War (7:51 p.m.)

Biden will tell Xi in a call Friday that China “will bear responsibility” if it backs Russia, and should use its influence with Putin to “defend the international rules and principles that it professes to support,” Blinken told reporters. He said the US is concerned that China may provide military assistance to Russia. Moscow and Beijing have denied US reports that such aid has been requested by the Kremlin.

Pressed over whether there could ever be normal ties with Putin after the war ends, Blinken demurred, saying only that there will have to be accountability for the conflict.

Germany Suggests Air Corridors for Refugees (7:11 p.m.)

German Foreign Minister Annalena Baerbock called for an air corridor by Western allies for Ukrainian refugees, especially in Moldova. “We now need a common solidarity air bridge within Europe, but also over the Atlantic,” Baerbock said after a meeting with NATO chief Jens Stoltenberg in Berlin.

She also announced that Germany will send more troops to strengthen NATO’s eastern flank but didn’t offer any details.

Mariupol City Council Says Situation is Critical (7:04 p.m.)

More than 350 000 people continue to hide in shelters and basements as the city is under siege for a 16th day, with an average 50 to 100 bombs falling on the city each day, according to the city council of the southern Ukrainian town. About 80% of residential buildings are damaged, and 30% are beyond repair.

Nearly 30 000 people managed to escape by private cars, the council said.

Ex-US Defense Chief Says It’s a Proxy War With Russia (6:13 p.m.)

The US is fighting a proxy war with Russia “whether we say so or not” and should “provide as much military aid” as possible to Ukrainian fighters, former Secretary of Defense Leon Panetta said Thursday on Bloomberg Television’s “Balance of Power with David Westin.”

“Diplomacy is going nowhere unless we have leverage,” said Panetta, who also served as director of the Central Intelligence Agency. “The way you get leverage is by, frankly, going in and killing Russians.”

Panetta didn’t specify what types of military aid the US should give Ukraine but said the only way to persuade Putin “that he should take some kind of an off-ramp is to continue to beat him on the battlefield.”

Slovakia Offers Anti-Air Missiles If Replacement Available (4:40 p.m.)

Slovakia is willing to provide its S-300 air defense system to Ukraine if the NATO country receives an appropriate replacement or an air defense capability “guaranteed for a certain period of time,” Slovakia’s Minister of Defense Jaroslav Nad said at a press conference with US Defense Secretary Lloyd Austin.

Slovakia relies on the Russian-made S-300 for its own air defense, so without a replacement there would be a “security gap,” Nad said. The NATO country is in discussion with the U.S. and the alliance, Austin said without providing further details.

Slovakia is one of three NATO countries that have the Russian-made air defense system. The other two are Bulgaria and Greece. Ukraine already has about 100 of these systems.

Russian Grain Exports Flowing at Slower Pace (4:30 p.m.)

Russian grain exports are moving at a slower pace than a year ago as the war in Ukraine enters its fourth week.

AgFlow, a Geneva-based crop data company, estimates about 73 vessels carrying wheat and other staples departed Russia in the first two weeks of March, versus 220 during the same period of 2021. Another ship-tracking platform, Sea/ by Maritech, estimated crop tonnage from the nation’s ports in the week to March 12 fell by half from the preceding seven days.

Russians Kill 21 Near Kharkiv in Shelling Attack (4:25 p.m.)

Russian forces killed 21 people and wounded 25 by shelling the town of Merefa, west of Kharkiv, early Thursday, the Kharkiv regional prosecutor’s office said. The attack destroyed a cultural club and the town’s school, it said.

DTEK Says 1.3 Million Ukrainians Are Without Power (4:20 p.m.)

Ukrainian utility DTEK Energy BV Chief Executive Maxim Timchenko said 1.3 million people are disconnected from the power grid, many of them in the besieged city of Mariupol, as well as the capital Kyiv. The company is diverting coal generation to its power stations in the west of the country and switching some units to run on gas.

DTEK, Ukraine’s largest private power utility, says it’s producing 45 000 tonnes of coal per day, roughly half of demand, and has boosted gas supplies. Timchenko welcomed a deal between the EU and Ukraine yesterday to link energy supplies, and said that in the long run, Ukraine could become an exporter to the EU.

Biden to Speak With Xi Jinping on Friday (1:05 p.m.)

President Joe Biden will speak with Chinese counterpart Xi Jinping on Friday, as the US leader looks to shore up global pressure on Russia to halt its war in Ukraine.

It will be the pair’s first call since November, and follows a meeting in Rome Monday between National Security Adviser Jake Sullivan and China’s top diplomat, Yang Jiechi.

“The two leaders will discuss managing the competition between our two countries, as well as Russia’s war against Ukraine and other issues of mutual concern,” the White House said in a statement.

© 2022 Bloomberg

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