China and Russia: A Match Made in Ukraine
As Joe Biden and numerous European leaders boycotted the Winter Olympic opening ceremony in Beijing over China’s human rights abuses, their absence was overshadowed by the presence of another president: Vladimir Putin. The Russian president’s attendance in China was far more than just a leisure trip; it was a clear demonstration of political and economic unity between the two powers, and the introduction of yet another headache for those opposed to Putin’s potential invasion of Ukraine.
It was on the morning of the Opening Ceremony on 4 February that Putin and Xi issued a joint declaration of support, the 5000 words in their statement sent stark warning signs to the West. They stressed the strength of the two countries relationships, stating that ‘friendship between the two States has no limits, there are no ‘forbidden’ areas of cooperation.’ Both leaders warned of ‘certain states’ attempts to impose their own “democratic standards” on other countries’ and that such actions ‘pose serious threats to global and regional peace and stability and undermine the stability of the world order.’
Despite such a clear jab at the US, arguably of most concern to the White House was both countries support of their respective controversial foreign policy. Russia explicitly stated their opposition to ‘any forms of independence of Taiwan’ and while China made no direct mention of Ukraine, they stated their sympathy towards ‘the proposals put forward by the Russian Federation to create long-term legally binding security guarantees in Europe.’
While the factors behind a Russian invasion of Ukraine are complex and the military outcome is still yet to be seen, such a declaration has the possibility of removing the West’s greatest threat against military action: economic sanctions.
Economic sanctions have been the dominant focus of the West’s potential retaliation against a Russian invasion, and for good reason. The potential by the US to limit or completely ban technology exports could have devastating impacts on both the Russian defence sector as well as its consumer market, limiting the supply of parts used in phones and appliances. The US also possesses the power to limit the influence of Russian banks globally, removing them from SWIFT – the banking messaging system used for international transfers.
The Russian energy sector could also be the victim of major sanctions. Constituting 25% of national GDP, any damage done to the industry could be crippling for the Russian economy. While Biden’s administration has already alluded to sanctions on current natural gas exports, they’ve also threatened the prospect of restrictions on future investments. This includes preventing the opening of Nord Stream 2, a natural gas line from Russia to Germany, which Russian state-owned Gazprom has already poured billions into.
Here then is where China can rescue, or at the very least minimize the damage to, the Russian economy caused by potential economic sanctions. China, while being the world’s largest energy consumer, create little themselves and rely almost entirely on imports. Russia, already Beijing’s third-largest gas supplier, could expand sales to China if sanctions are imposed elsewhere, offsetting the potential loss of their European markets. This process seems already to be underway, with Putin recently announcing a new contract between China and Russia’s Far East, expected to bring in $37.5 billion over the next 25 years.
Yet China’s willingness to support Russia following an invasion of Ukraine is less likely than the 4 February document may suggest. One primary reason is that a stable Ukraine is valuable to China. Over the last three years, Chinese investors have injected $6 billion in their Belt and Road initiative in Ukraine, expanding transport links from China to Asia and Europe. War in Ukraine could cause disruptions to a policy central to Xi Jinping’s economic plans.
The potential to cause even more disruptions for China however is the possibility of secondary sanctions from Washington imposed upon them if they are to show economic solidarity with Russia’s invasion. Such sanctions would likely mimic those imposed on Russia, albeit to a lesser extent, especially focused on limiting American exports of technology. The threat of a Chinese import ban in America could also prove damaging for Jinping’s economy, with American exports constituting 17% of total national exports (whereas Russia only represents 2% of Chinese exports).
So just over two weeks after a unilateral display of solidarity in Beijing, Russia and China’s relationship has the potential to be given its first major test. Will China protect itself or its ideological ally? Are there really no limits to the 'friendship' between these two superpower states?