EU cuts 5 Chinese firms from sanctions list after Beijing vows to stop flow of military goods to Russia

Two EU diplomats said the arrangement can be seen as a test of whether China is acting in good faith.

In some cases, the companies are accused of shipping microchips that are used in cruise missiles.

The discussions happened after the Chinese ambassador to the EU, Fu Cong, publicly complained that Brussels had not presented evidence that the firms – some of which are based in Hong Kong – were providing a loophole through which European hi-tech goods could move to Russia.

China has threatened to retaliate in kind to any sanctioning of its companies, but also offered to help the EU stop companies from providing loopholes, should it present evidence.

“When it comes to these companies, let me be very clear: if the European side imposes sanctions on Chinese companies without providing us with any solid evidence to show that these companies are engaged with activities that may circumvent or that have circumvented the EU sanctions on Russia, then we certainly will retaliate,” Fu told the British magazine New Statesman last month.

“But let me also emphasise that we want to resolve this issue in a cooperative way. I understand this 11th round of sanctions is aimed mainly at preventing circumvention. If the EU side has evidence that Chinese companies are engaged in such activities, please show us the evidence,” he added.