Chinese President Xi Jinping was in in a jubilant mood after Russian’s invasion on Ukraine and response from the West, particularly USA with unprecedented economic sanctions.
Initially, he was of the view that makes the credibility of both USA and Russia will be weaken globally and it would pay way for him to play key role in global leadership. China also expected that the conflict with Russia may distract Western powers’ attention and resources from the South China Sea and Taiwan.
However, the reported request from Russian President Vladimir Putin to rescue them with defence equipment’s and also financial assistance, China now seems locked in very delicate situation. In a way, it will have double-edged repercussions; just weeks after the two countries declared that their partnership has “no limits”,
Initially, Putin was not seen afraid of sanctions with a hope that China will provide an economic lifeline to Russia. On the other hand, China’s abstention from a draft United Nations Security Council (UNSC) resolution that would have deplored Russia’s invasion of Ukraine, which Russia vetoed, was interpreted as a diplomatic win by both Russia and the West.
If China proceeds with liberal assistance to Russia, already USA warned that it will also faces severe sanctions. If, refrained from rescuing Russia from the present crisis that would badly hit their relations.
After witnessing the unprecedented economic mess that Russia is now witnessing after sanction, China is said to be practically in a `panic situation’ fearing that it will be also targeted in the similar way, if `dared’ to `assist’ Russia in the conflict.
Chinese banksandcompanies also fear secondary sanctions if they deal with Russian counterparts. Most Chinese banks cannot afford to lose access to US dollars and many Chinese industries cannot afford to lose access to US technology.
Even if China wants to support Russia in areas that are not subject to sanctions, such as energy, experts feels that Beijing may face severe restrictions.
The “financial sanctions that have been imposed on Russia by the West put significant practical constraints on China’s dealings with Russia even where they don’t restrict them directly,” said Mark Williams, chief Asian economist at Capital Economics, in a research note.
Moreover, the heightened tensions in global politics are not conducive to China’s development plans or its ambition of national rejuvenation. China also needs to ensure domestic stability ahead of the important Party Congress in autumn this year, which is expected to extend Xi’s term in office.
China – Russia Strategic interests
China and Russia share a strategic interest in challenging the West. But the invasion of Ukraine has put the friendship to the test. The West’s handling of the Ukraine crisis pushes Moscow and Beijing further into a long-term strategic partnership that is committed to reforming the world order against U.S. domination.
“China’s leaders are walking a very difficult tightrope on Ukraine,” said Craig Singleton, senior China fellow at the Foundation for the Defense of Democracies, a DC-based think tank.
Asian Infrastructure Investment Bank, a development bank backed by Beijing, said it was suspending all its activities in Russia as “the war in Ukraine unfolds.”
China is badly needed Russian partnership to play decisive role globally, so that to check the influence of USA and other Western regimes. Russia and China have tightened cooperation in recent times as both have come under strong Western pressure over human rights and a raft of other issues.
Unnamed US officials reportedly told multiple news outlets that Russia had asked China to provide military assistance after it began the invasion. However, the Chinese foreign ministry accused the US of spreading disinformation. Russia denied asking Beijing for military help.
US National Security Adviser Jake Sullivan said in an interview that they were “communicating directly, privately to Beijing that there will absolutely be consequences for large-scale sanctions evasion efforts or support to Russia to backfill them”.
He warned that they will not allow that to go forward and allow there to be a lifeline to Russia from these economic sanctions from any country, anywhere in the world.
With regard to Russian invasion on Ukraine, Beijing has not condemned Russia’s attack and does not call it an invasion, but it has urged a negotiated solution. Publicly, the Chinese government has called on both sides to de-escalate tensions in Ukraine.
Strong economic ties
The two countries have strong economic ties; trade reached a record $147 billion last year. China is Russia’s top export market after the European Union. Russian exports to China were worth $79.3 billion in 2021, with oil and gas accounting for 56% of that, according to China’s customs agency.
During Putin’s visit to Beijing for the Winter Olympics, the two countries signed a series of cooperation agreements, involving as many as 15 deals, on February 4, 2022. They include new contracts with Russian energy giants Gazprom and Rosneft. China also agreed to lift all import restrictions on Russian wheat and barley.
Last year, 16% of China’s oil imports came from Russia, according to official statistics.This makes Russia the second biggest supplier to China after Saudi Arabia. About 5% of China’s natural gas also came from Russia last year.
Russia, meanwhile, buys about 70% of its semiconductors from China, according to the Peterson Institute for International Economics. It also imports computers, smart phones, and car components from China. Xiaomi, for example, is among the most popular smartphone brands in Russia.
An escalation or prolonged Ukraine conflict would likely to bring chaos to international capital markets, supply chains, and global economy as a whole. That is not what China wishes to see at a time when a post-COVID-19 recovery is badly needed and when China itself at a crucial juncture of economic restructuring.
On the otherhand, the EU is China’s biggest trading partner, and China will try to maintain normal relations with the EU as well as its member states. China still has hopes for Europe to become one solid pole in the formation of a multipolar world with more strategic independence from the United States.
China fears of consequences
Despite that, and the close personal relationship between Presidents Vladimir Putin and Xi Jinping which was on show at the recent Winter Olympics, China fears of facing consequences stemming from continued support for Russia.
But in the days after Russia’s invasion, China has condemned the UK, the US, and others for giving weapons to Ukraine’s military, saying they were adding “fuel to the fire”. If the US intelligence assessment is correct and Beijing follows through on that request, then they too would be “adding fuel”.
Initially, both China and Russia denied any such request for assistance between them and accused it as a `disinformation campaing’. A spokesman for the foreign ministry in Beijing, Zhao Lijian, said the US had “been spreading disinformation targeting China on the Ukraine issue, with malicious intentions”.
Asked if he could clarify whether China had received a request for military help from Russia, Zhao said this was “fake news” but did not deny it directly. He added that China’s stance had always been consistent and that China was playing a constructive role in promoting talks.
In the same way, Kremlin spokesperson Dmitri Peskov was asked about the remarks made by US officials and denied the claims, replying: “No. Russia possesses its own independent potential to continue the operation. As we said, it is going according to plan and will be completed on time and in full.”
However, interestingly Russia said on March 13, 2022 that it was counting on China to help it withstand the blow to its economy from Western sanctions over the war in Ukraine, but the United States warned Beijing not to provide that lifeline.
Russian Finance Minister Anton Siluanov said sanctions had deprived Moscow of access to $300 billion of its $640 billion in gold and foreign exchange reserves, and added that there was pressure on Beijing to shut off more.
“We have part of our gold and foreign exchange reserves in the Chinese currency, in yuan. And we see what pressure is being exerted by Western countries on China in order to limit mutual trade with China. Of course, there is pressure to limit access to those reserves,” he said.
But, he expressed hope that their partnership with China will still allow them to maintain the cooperation that they have achieved, and not only maintain, but also increase it in an environment where Western markets are closing.
Siluanov’s comments in a TV interview marked the clearest statement yet from Moscow that it will seek help from China to cushion the impact.
