It is a high-stakes year for Xi Jinping, who hopes to secure a third term as Communist Party chief. He can ill afford to be seen backing a loser
FOR MOST of those involved in Ukraine’s horrors, time is not on their side. Every hour brings new agonies for the Ukrainian government and people. Each passing day exposes, with greater clarity, the miscalculation of Russia’s leader, Vladimir Putin, when he launched a war of choice against a country he vastly underestimated. For America and its allies, admiration for Ukraine’s resistance is tempered by fears that it cannot last for ever, as Mr Putin escalates the killing.
China has good reason to wish for an outcome that will satisfy Mr Putin. Humiliation for Russia’s leader—or worse still, his overthrow—would leave China’s president, Xi Jinping, personally exposed. Mr Xi signed a joint statement with Mr Putin less than a month before the invasion, declaring that “friendship between the two states has no limits”. It also expressed opposition to any further expansion of NATO and to American alliance-building in Asia.
Oil and gas dominate the trade relationship. Russia is China’s third-largest supplier of gas. China bought nearly one-third of Russian exports of crude oil in 2020. But the recent energy deals between the two countries will hardly be a quick fix for Russia’s economic misery. China imported only 10bn cubic metres of natural gas from Russia in 2021 via the Power of Siberia, the sole pipeline that links the two countries, far short of the 175bn cubic metres imported by Europe.
Western sanctions are making it difficult for Russia to buy technology. But it is doubtful whether China will make up the shortfall. Take, for example, the aviation industry: Russia is in desperate need of gear to keep it working. America alone sold Russia more than $880m-worth of aircraft, engines and parts in 2021.
State-owned groups are said to be looking at possible acquisitions in Russia as Russian asset prices fall. Chinese banks could bolster the financing of yuan-denominated trade with Russia using CIPS, China's homegrown cross-border payments system. But Chinese firms are mindful of the risk to their reputations in other, more important markets should they pile into Russia. And Chinese lenders risk being hit with sanctions.
In contrast, European governments with markets and technologies to which China wants access, notably Germany and France, are being targeted with a charm offensive. Europeans are being told that America wants to profit from the war, while Europe pays the price in soaring oil and gas prices and a flood of Ukrainian refugees. It is time for Europeans to seek more autonomy from America and deepen ties with China, runs the message from Chinese officials and academics.
Russia may also have to give more leeway to China in the Arctic, suggests a Beijing-based diplomat. China sees that region as a new strategic frontier. It wants access to natural resources there, including fishing grounds. It would like to lay digital cables across it to connect Asia and Europe. There may be opportunities for Chinese firms to build ports along Russia’s northern coasts, as climate change opens new shipping lanes. “A weakened Russia will be more malleable,” predicts the diplomat.
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