Ukraine crisis tests Xi Jinping’s pivot to Vladimir Putin

Economy News

Russia’s threats to invade Ukraine are forcing China to strike a balance between Xi Jinping’s growing support with Vladimir Putin and Beijing’s self-interest in the region’s stability, according to analysts.

The crisis, sparked by Vladimir Putin’s decision to concentrate 190,000 Russian troops near the Ukraine border, remains volatile. Putin and Joe Biden have accepted “the principle” of a summit to ease tensions over Ukraine following warnings from the US president that Russia could invade within “several days”.

China joined Russia this month in opposing NATO expansion, highlighting a new level of co-operation between Xi and Putin.

Wang Yi, China’s foreign minister, told a European security conference on Saturday that “the sovereignty, independence and territorial integrity of any country should be respected”.

“We hope that a solution can be found through dialogue and consultation that will really guarantee security and stability in Europe,” said Wang.

The foreign minister’s remarks reflected a change from late January, when he offered support for Russia in its stand-off with the US and NATO over Ukraine, saying Moscow had “reasonable security concerns”.

Wang’s tone departed, too, from his own ministry, which has lambasted Biden for stoking tensions.

Vladimir Putin and Xi Jinping

Vladimir Putin, left, and Xi Jinping in Beijing this month. China said Moscow had ‘reasonable security concerns’ over NATO © Aleksey Druzhinin / Sputnik / Kremlin / Reuters

Beijing, according to one senior international relations academic at a top Chinese university, must “strike a balance” in supporting Moscow while also not damaging its own military and economic ties with Ukraine.

“There is a common misunderstanding among western media – and even some western officials – that China supports a Russian invasion of Ukraine, that is fictitious,” said the academic, who asked not to be named. “Any military conflict, especially large-scale war, will undoubtedly hurt China’s interests there.”

Beijing’s attempt to retain neutrality, however, will be tested if the west imposes financial sanctions to exert pressure on Russia.

“China’s decision either to adhere to new western sanctions or to help Russia avoid them will shape escalation pathways and determine the magnitude of economic and political isolation that imposes sanctions,” Chris Miller, director of the Eurasia program at the Foreign Policy Research Institute, a US think-tank, wrote in a report.

Analysts said China would seek separate pushback against the US and NATO, on which it openly supports Russia, from its reservations against a potential violation of Ukraine’s sovereignty.

China’s and Russia’s support for each other is strongest when they are challenging US supremacy because that’s where their interests are most aligned. When it comes to territorial claims, both have been displaying a rather ambivalent stance towards each other’s behavior, ”says Alexander Korolev, an expert in the Russia-China security relationship at the University of New South Wales in Sydney.

China’s interests in Ukraine include billions of dollars in construction contracts as well as telecommunication investments via Huawei and its purchase of Ukrainian military equipment.

Beijing has urged Kyiv and Moscow to revive the stalled Minsk agreement as a path to peace while insisting on adhering to its policy of non-interference.

Experts diverged over whether Beijing, which has been increasingly inward-focused since the onset of the coronavirus pandemic, would seek a higher profile diplomatic role in defusing tensions, or would stand by as Putin edges closer towards an armed conflict.

Russia’s threats to invade Ukraine have also presented China with a “gift” to increase its leverage over Moscow, strengthen its energy security, test the west’s sanctions regime and take advantage of a splintering Europe, said resource and geopolitical analysts.

Russia does not give access to its resources very easily, [but] here China has leverage to say ‘we want to own this’, rather than to simply finance or pay for it, ”said Gavin Thompson, an Asia energy expert at consultancy Wood Mackenzie.

Western sanctions over the Ukraine crisis could also deepen Moscow’s dependence on Beijing, while their success or failure would be instructive to Xi for future conflicts with the US, experts said.

“If they succeed in imposing severe costs on Russia, western sanctions threats against China – which could be used in case of a crisis in Asia – would be more credible,” said Miller.

“[But] if China helped Russia mitigate the impact of these sanctions, the US would lose an important tool and its ability to constrain China using economic means would be reduced. ”

When Xi and Putin met in Beijing this month, the leaders also agreed to increase Russian gas supplies to China.

Thompson believed that the US might find it “very difficult” to target resources shipped directly from Russia to China.

“I think they feel quite bulletproof when it comes to those deals,” Thompson said of Russia’s energy arrangements with its neighbor. “If you can not touch it and the pricing and payment structures are mostly outside the standard global banking system, outside of the US dollar system, you can not really do very much about it.”

There is little transparency over the arrangement’s terms, but experts believe Sino-Russia energy deals have previously entailed Chinese loans and credit facilities. Typically, China lends in renminbi, meaning Russia must then purchase Chinese goods and services.

“[China has] the opportunity to do great deals. . . I think that is the opportunity to push hard on equity ownership of resources, ”Thompson said.

Cao Xin, secretary-general of the International Opinion Research Center, Charhar Institute, a Beijing think-tank, said he believed a Russian invasion remained “highly unlikely” but that Moscow appeared to be exploiting fissures between the US and Europe’s big powers to sow divisions in NATO.

Korolev also argued that conflicting interests in their immediate neighborhoods had not undermined the partnership between Beijing and Moscow, as the countries have pragmatically navigated related crises such as Russia’s armed intervention in Georgia in 2008 and its 2014 aggression in Ukraine.

“China avoided openly voicing support of Russian actions, but they did not directly oppose or criticize Russia either,” he said.

Additional reporting by Maiqi Ding in Beijing

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