US takes aim at Chinese banks aiding Russia war effort

The U.S. is drafting sanctions that threaten to cut some Chinese banks off from the global financial system, arming Washington’s top envoy with diplomatic leverage that officials hope will stop Beijing’s commercial support of Russia’s military production, according to people familiar with the matter.

But as Secretary of State Antony Blinken heads to Beijing on Tuesday, the question is whether even the threat of the U.S. using one of its most potent tools of financial coercion can put a dent in complex and burgeoning trade between Beijing and Moscow that has allowed the Kremlin to rebuild a military badly mauled by more than two years of fighting in Ukraine.

China has heeded Western warnings not to send arms to Russia since the beginning of the war, but since Blinken’s trip to Beijing last year, China’s exports of commercial goods that also have military uses have surged. With China now the primary supplier of circuitry, aircraft parts, machines and machine tools, U.S. officials say Beijing’s aid has allowed Moscow to rebuild its military industrial capacity.

The West now worries Russia could win against Ukraine in a war of attrition, particularly if allies don’t mobilize their own industries to match Russian production.

Blinken and other top cabinet officials have been sounding the alarm among Western allies, including last week at a meeting of the Group of Seven industrialized nations in Capri, Italy.

But this time as he heads to China, officials are counting on the threat of Chinese banks losing access to the dollar and the risk of roiling trade ties with Europe persuading Beijing to change tack. The banks serve as key intermediaries for the commercial exports to Russia, handling payments and providing client