China’s support for Russia in the war in Ukraine shows its limits as the domestic costs for Chinese President Xi Jinping begin to outweigh the benefits of confronting the United States
Whether it is a trade war or a real war like in Ukraine, China has shown that it will try to prevent its geopolitical struggles with the United States from harming the national economy. A rapidly deteriorating COVID situation and the need to maintain stability in a pivotal year for Xi make it less likely that the Chinese leader will allow Russian President Vladimir Putin’s invasion of Ukraine to backfire. .
Signs of domestic pressure were evident on Tuesday as US warnings against Chinese financial and military support for Russia heightened investor concerns about the decoupling of the world’s two largest economies. An index of Chinese stocks listed in Hong Kong fell 6.6% to the lowest level since 2008, while the Shanghai Composite index fell the most in two years. A so-called fear gauge – similar to the VIX in the US – has now jumped 78% in the past two days.
In this context, Chinese Foreign Minister Wang Yi told his Spanish counterpart Jose Manuel Albares that Beijing wants to prevent sanctions from causing further damage to global markets. “China is not a party directly involved in the crisis, and it does not want to be further affected by the sanctions,” Wang said Monday, according to a Foreign Ministry reading of their appeal.
The comment is consistent with calls from China to de-escalate the crisis, even as Beijing tries to blame the United States for inciting war and its diplomats push Russian conspiracy theories about biological labs in Ukraine. Beijing’s actions appear calibrated to minimize the chances that it will be dragged into a global confrontation or dragged lower economically as it seeks a way out of the pandemic.
“China will try to maintain its strategic partnership with the Russian Federation while trying to offset reputational and economic costs,” said Joseph Torigian, an assistant professor at American University who has a forthcoming book on power struggles. in the Soviet Union and in China after Josef Stalin and Mao Zedong. “Nor has China sacrificed its own economic interests to help Russia overcome Western sanctions.”
The war in Ukraine has multiplied Xi’s challenges in a year in which Chinese policymakers have pledged to prioritize political stability. The Communist Party leader is set to reassert his reputation as China’s strongest leader since Mao ahead of a two-decade-long reshuffle in the second half of this year, in which he is expected to extend his term to 15 years, an unprecedented precedent. .
This gives Xi a strong incentive to comply with US sanctions, even after years of acrimony with Washington and declaring a “limitless” partnership last month with Moscow. China has adopted a similar strategy throughout a trade war with former US President Donald Trump, amplifying the rhetoric while avoiding any retaliation that could have harmed Chinese businesses and industries.
A six-hour meeting between senior US and Chinese officials on Monday sparked speculation of an impending call between Xi and President Joe Biden. The White House said talks in Rome between US national security adviser Jake Sullivan and senior Chinese diplomat Yang Jiechi were “substantial” while Beijing said they were “constructive”.
“A very different world”
“The big question now is what decisions and actions China takes,” Singaporean Foreign Minister Vivian Balakrishnan said in an interview to be aired at the upcoming Bloomberg Live Asean Business Summit, adding that Beijing has “huge influence on Russia. “If you get a deepening of the bifurcation of the global economy, supply chains, technology, it’s going to be a very, very different world.”
On Tuesday, China’s envoy to Washington issued one of Beijing’s clearest denials to date, saying he received advance warning of the war from Russia. China has made “tremendous efforts” to push for peace talks and threats by US officials that China will face consequences if it tries to help Russia evade sanctions were “unacceptable”, wrote Ambassador Qin Gang in the Washington Post.
“Assertions that China knew about, condoned or tacitly supported this war are pure misinformation,” he wrote. “If China had been aware of the impending crisis, we would have done our best to prevent it.”
China has already paid some price for not publicly condemning Russia’s attack on a sovereign nation. The war has prompted comparisons between Putin’s efforts to reclaim what he sees as lost land and China’s own territorial claims to places like Taiwan. Analysts have attributed at least some of the recent declines in the Chinese market to fears that Beijing may ultimately fall into Moscow’s camp.
“China is hedging its bets very carefully,” said Alexander Gabuev, senior fellow and president of the Russia in Asia-Pacific Program at the Carnegie Moscow Center. “There’s this support for the kind of legitimate Russian concerns about European security architecture and criticism of NATO, but it’s also a way of saying that American-led alliances are bad.”
Xi is “personally invested”
Any losses China has suffered so far pale in comparison to the pain of being dragged into the unprecedented sanctions regime that has brought down the Russian currency, prompted an exodus of foreign businesses and cut off Moscow from imports of key technology. This has led some prominent Chinese analysts like Hu Wei, vice president of the State Council-affiliated Center for Public Policy Research, to argue for a clean break with Russia “as soon as possible” so that China can save from isolation.
An essay laying out Hu’s advice was quickly removed from China’s heavily censored internet, where comments supporting Russia and criticizing U.S. midget support for Ukraine and reports of civilian casualties. Still, the article showed that some in China were concerned about the direction the country is heading after four decades of economic growth driven by closer ties with places like Europe, Japan and the United States.
“More scrutiny from the international community has been directed at Taiwan, which stands to benefit from greater Western support, to the detriment of PRC ambitions there,” said Elizabeth Wishnick, senior researcher at the Virginia-based CNA research institute, referring to the People’s Republic of China. .
“Xi has a lot to lose as he is personally invested in the relationship with Putin,” she added. “And the apparent failure of his Russian policy to deliver strategic dividends – and incur strategic losses instead – would hurt his efforts to extend his term.”
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