After the invasion: The future of China-Russia relations

We do not know if Vladimir Putin, President of Russia, informed Xi Jinping, General Secretary of the Chinese Communist Party (CCP), and thus, President of the PRC, of his intention to invade Ukraine. If he did not during his visit on 4th February or did, but only shortly before the invasion, it would show that ‘friendship’ masks a lack of genuine warmth or trust. If Xi did know in advance, he was either unable or unwilling to talk Putin out of the venture. Again, the former suggests that the statement of friendship is exaggerating the closeness of the relationship, the latter that Xi regards invasion as in the People’s Republic of China’s (PRC) interests. But is it?

Russia’s invasion of Ukraine: Pluses and minuses for the PRC 

We do not know the CCP’s pre-invasion assessment of how the United Kingdom (UK), the United States (US) and other major democracies would react. There is now greater clarity around sanctions and expulsion from the SWIFT banking clearing system. They may be surprised – disappointed even – at the unity and strength of purpose from the liberal democracies. From a CCP point of view, the picture is mixed.

On the positive side:

• Russia will have to turn even more to the PRC to sell oil, gas and other commodities. This will make it easier for the PRC to drive down the price. 

• Sanctions mean that Russia will have to turn more to the PRC for other needed goods and equipment (in 2019 22% of Russia’s imports came[↗] from the PRC, while 37% were procured[↗] from the European Union (EU)).

• With Russia excluded from SWIFT, the PRC may hope that this will boost the use of its own Cross-Border Interbank Payment System (CIPS). It is a long-standing ambition of the CCP to move more trade away from the US dollar to the Chinese yuan. They may hope that other countries will be encouraged to use CIPS – hope and outcome are of course different.

• The North Atlantic Treaty Organisation (NATO) will be distracted. The CCP has not welcomed NATO’s recent talk of paying more attention to the Indo-Pacific region. The CCP may also hope that the impetus behind the AUKUS group is also weakened.

• Now otherwise friendless, Russia will be in no position to resist the PRC’s geopolitical or economic intrusion in Central Asia, Siberia, the Arctic, India or other future potential areas of contention.

On the negative side:

• The PRC will not want to be seen to be supporting a Russia which so blatantly goes against the CCP’s own principles of non-interference in other sovereign states and of ‘territorial integrity’. These elements were emphasised[↗] by Wang Yi, Chinese Foreign Minister, on 19th February, when he specifically included Ukraine in discussing the principle. The recent declaration that there are no limits to friendship and no restricted areas for cooperation with Russia does nothing for the CCP’s pretensions to be a responsible global power.

• War will disrupt Chinese trade with Ukraine, which was picking up from a low base[↗] of US$8.25 billion (£6.19 billion) in 2020. Although Chinese investment was also small, as Ukraine developed there were opportunities[↗] for Chinese companies in port and transport construction among other sectors.

• Food security is a vital CCP interest. Around 30% of Chinese corn imports come[↗] from Ukraine. The disruption of grain exports will raise prices for the PRC.

• The CCP is looking to diversify its supplies of iron ore, not least from Australia with whom it continues to quarrel. Ukraine has at least 6.5 billion tons of iron ore. In 2020 ore was Ukraine’s largest export to the PRC, around[↗] 35% of the total. Building the infrastructure to ship more ore is now a risky proposition.

Taiwan

Putin’s invasion of Ukraine does not make Xi’s invasion of Taiwan[↗] more likely. In essence, likely sanctions, exclusions from global economic bodies, denied access to or destruction of semiconductors would devastate the Chinese (and global) economy; resulting unemployment combined with an inadequate social security net would lead to protests directed at the CCP and might threaten its hold on power. Xi, while a risk taker in domestic power infighting, is more conservative in geopolitics. He is no Putin – at least for the present.

Nevertheless, the CCP will be watching closely the liberal democracies’ reaction to Russia’s invasion of Ukraine and assessing their likely reactions to a forceful unification of Taiwan. The extent and unity of sanctions and exclusions will be of intense interest. A weak stance against Russia, particularly in Europe, will increase pressure on Taiwan, even if invasion is not contemplated. 

The People’s Liberation Army (PLA) will be looking carefully at the conduct of war by Russia and what lessons that might teach about the conventional use of forces, ‘grey zone warfare’, and also about subduing a hostile population. 

The balance sheet for the CCP 

The CCP will have been hoping for a swift conclusion to Putin’s invasion. Its outcome and the future hue of a Kyiv government will have been a very distant second to the pursuit of the PRC’s own economic and geopolitical ambitions. Balancing the pluses and minuses is an inexact science, but energy and the Russian market, as well as wider geopolitical reasons, are likely to outweigh the negatives and the PRC’s interests in Ukraine. That may change the longer war continues and the more it escalates.

…And for relations between liberal democracies and the PRC 

The Russian invasion of Ukraine is likely to promote further decoupling between the economies of the democracies and the PRC within the global economic system. Sanctions on Russia and its expulsion from SWIFT will encourage Beijing to rely more on alternative systems of trade and finance. 

It would be comforting to think that Putin’s invasion will lead to Xi rethinking the drift away from liberal democracies towards autocracies. If reports are true that the US briefed the PRC in advance of Putin’s plans, perhaps the CCP might be led to trust the US more. This is wishful thinking. Distrust of the US runs very deep. Every document and speech of the last few years has talked of struggle, hostile foreign forces, the encouragement of colour revolutions, and attempts to overthrow the CCP. 

Early in his tenure, Xi was cutting about the fall of the Communist Party of the Soviet Union. One criticism was its lack of a strong leader. Yet there is strong, and there is maverick. Putin has now become a risky ally. But on the plus side for the CCP, Russia is fast becoming a vassal of the PRC.

Charles Parton is a James Cook Associate Fellow in Indo-Pacific Geopolitics at the Council on Geostrategy. He spent 22 years of his 37-year diplomatic career in the British Diplomatic Service working in or on China, Hong Kong and Taiwan.