As the war in Ukraine enters its second month, Russia’s isolation on the global stage has been severe. Yet, the war goes on unabated, causing enormous damage to human life and physical infrastructure. One cannot help but wonder about the ties Russia shares with the world’s second largest economy – China. Will China come to Russia’s rescue given the continuing crippling sanctions served by the West?
To know more about China-Russia equations in the face of this conflict, we speak with Andrew Cainey, senior associate fellow at RUSI and founding director of the UK National Committee on China.
Unravel: What does the Ukraine-Russia conflict mean for China?
Andrew Cainey: It brings uncertainty, instability and complications. And, now that it has happened, a learning opportunity, a balancing act to be performed and maybe a diversion that can be used. With China’s Omicron wave surging, a weakening economy and Xi Jinping seeking confirmation of his third term in office in October, this would ideally have been a year to focus on China’s internal issues.
Instead, Russia’s failure to overwhelm Ukraine in a few days has turned the invasion into a critical moment for geopolitics. The response from NATO and the EU has shown unexpected strength and cohesion. Australia, South Korea, Japan and Singapore have also made notable responses. India stands in contrast, taking a line more supportive of Russia. Xi now needs to balance his stance between Russia, in light of February’s announcement of a China-Russia friendship ‘without limits’, and the US and Europe which are 20 times more important as export markets. It remains though a skewed balancing, tilting to Russia, while making sure not to lose balance and fall. A perceived US ‘victory’ over Russia or—even worse—Putin’s removal from office will not reflect well on Xi’s judgment in declaring the no-limits friendship and on the outlook for China’s governance model.
But all leaders need to work with the world as it is – and the most skilful put to good use the events that unfold. For China, Ukraine has yielded many insights: how different countries have responded; the options that are on or off the table; and the effectiveness or otherwise of policy actions – of sanctions, of weapons, of resistance. Moreover, Ukraine is now taking up the time of western leaders. There is only a limited amount of leadership attention to go around. In the short-term, Ukraine diverts attention away from China’s own neighbourhood. Nonetheless, the US and European outreach to the Indo-Pacific continues. It may yet end up stronger as some leaders draw parallels between the actions taken against Russia and what might be needed to dissuade China from taking action on Taiwan.
Unravel: What do you make of China’s reluctance to make any statement about the war?
Mr Cainey: China has actually made many statements about the war. It can at times be hard to reconcile these statements. It is though possible. China has mostly abstained on key UN votes, though at times it has supported Russia, for example in the International Court of Justice.
At an international level, China is, above all, calling for peace and mediation. This message has a clear undertone, sometimes implicit, sometimes explicit, that it is NATO that is most at fault in provoking Putin and destabilising Russian security. “Let he who tied the bell on the tiger take it off”, goes a Chinese saying. For China, it is NATO that tied the bell. China restates its commitment to the ‘no limits’ partnership with Russia in February – while also stating that the UN Charter means that there are limits to the actions that China can support for any country. Within China, the Chinese Communist Party’s ‘guidance’ to broadcast and social media has been to calm down extreme views. Yet Chinese state media continues to support and publicise messaging predominantly from the Russian side. China does not accept the right of the US to impose sanctions which may harm China indirectly – but at the same time appears willing to go along with them for the most part in order to avoid the risk of secondary sanctions.
Unravel: Do you think Russia will turn to China as a buyer of oil and natural gas? Why or why not?
Mr Cainey: There is a well-developed global market, or series of interconnected markets, for oil and gas. Sanctions then constrain and segment this market – see, for example, US sanctions currently on Iran or Venezuela. Russia will seek to sell to the most attractive buyer at any time, given prevailing conditions. China certainly needs oil and gas: it is just a question of which suppliers offer the most favourable and reliable terms. The more that Europe decides not to be a buyer, the more Russia will turn to China in order to secure foreign exchange payment for its energy. And, at the margin, both sides may be happy to go that bit further in their transactions in order to diversify options and show solidarity in the light of western sanctions.
Unravel: Do you think Putin’s actions in Ukraine may embolden Chinese action in Taiwan?
Mr Cainey: Nothing in the Russian invasion changes the ambitions that China has to truly unify Taiwan into the People’s Republic. China would much prefer this not require force but has not ruled it out. Rather than embolden Chinese action, Putin’s actions are likely to make China pause for thought. The slow progress of Russian troops combined with the strength of the western response has proven salutary. Though both China and the US have said that “Ukraine is not Taiwan”. There are indeed many differences. The West will find it much more costly and difficult to enact Russia-style sanctions against China.
Ukraine has provided China with lots more information about what it will take for successful action against Taiwan. It has reinforced the need for speed, to present a fait accompli to the international community – and the riskiness of the whole endeavour in current circumstances. After all, if attempted, failure would be unthinkable.
Unravel: How would you assess China-Russia ties? Is there a natural complementarity, or is it simply a case of having the same perceived foes?
Mr Cainey: It is possible to look for complementarity between pretty much any pair of countries. And we can find some in the China-Russia relationship – in particular regarding energy, natural resources and arms, with Russia, as the weaker economy keen to secure reliable customers and foreign exchange earnings. Chinese investment also becomes more interesting as so many western companies have left Russia.
But nothing is immutable. Recall that in the 1970s, relations between China and the Soviet Union were so strained that the Chinese agreed to operate joint spy stations with the US in western China. Today, both the economic and security positions have shifted. More important is that Putin and Xi are on the same side in what Biden has called a competition between democracy and autocracy. And, for Xi especially, there is now a public declaration of friendship between Russia and China, broadcast widely to the Chinese people, that is hard to walk away from. How far the friendship extends in tangible actions remains to be seen.
Andrew has 30 years’ experience advising governments, companies and non-profit organisations across Asia and Europe. He is also co-founder of Asiability, an advisory firm; a non-executive director of Schroder Asian Total Return Investment Company; and a senior advisor to Lumen Capital Investors. Andrew was previously the managing partner of Booz & Company’s Greater China consulting operations; the partner leading the Rt Hon Tony Blair’s Asian government advisory practice; and the partner in charge of Boston Consulting Group’s Asian financial institutions practice. He has also been a Senior Fellow with Fung Global Institute in Hong Kong; an Associate Fellow in Chatham House’s Asia-Pacific Programme; a Senior Fellow in the Security and Crisis Management Programme (International Centre) at the Shanghai Academy of Social Sciences; and a Policy Advisor in the Conservative Party’s Policy Unit.