Overview:
Presidents Xi and Putin recently met in Moscow in what was a very one-sided affair. Russia may have promised everything and received nothing.
It is no secret that both Russia and China have long sought to wrest US hegemony away from the West and provide an alternative locus of supreme power. However, the ill-advised war in Ukraine has done more damage to Russia’s hard and soft power than anything else NATO could have dreamed up.
Things have become desperate for Russia. Even as much of the rest of the developed world (particularly the US and Europe) continues to send copious state-of-the-art military equipment and aid, assist with training and intelligence, and provide huge amounts of humanitarian aid and funding, Russia was today dusting off old T-54s/55s designed in the 1940s, and sending them to the battlefront.
Nothing spells asymmetry more than seeing Ukraine get provided with Leopard 2s, Challenger 2s, Abrams M1A1s main battle tanks, and deadly depleted uranium shells, while Russia dusts off museum pieces.
In light of such a wealth of support (though there is still room for so much more aid to finish this war sooner rather than later), it is no surprise that the Kremlin would be welcoming China’s premier with open arms.
Or more accurately, on bended knee, representing a vassal state.
Shortly before Xi Jinping’s visit to Moscow, China had released a proposed peace plan. Yet this was a suitably vague expression of a mere desire. It had as much actual geopolitical and strategic substance as something dreamt up by a schoolchild. Instead, it was a signal to the rest of the world that they were not merely a silent partner in Russia’s imperialistic machinations.
Essentially, it was a permission slip for Russia to keep on fighting.
China straddles the fence. Xi is navigating a subtle and careful path between the other competing world powers. At the end of the day, they are in a win-win position. If Russia loses the war, China gets to swan into their neighbor’s house and help themselves to all of their goods—their vast wealth of natural resources—and perhaps even some of their land, in the name of helping them back on their feet. After all, they would need to look after their “dear friends” at a time of acute need. You can bet your bottom dollar that Chinese enterprises and government entities would be involved in helping Russia to get back up.
On the other hand, if Russia were to win, China would laud their close relationship and take advantage of the shift in global power away from Europe and the US. All the while consuming vast quantities of Russian hydrocarbons at knockdown prices.
Xi Jinping was, then, in a position of immense power going into the meetings with Vladimir Putin. Putin and Russia desperately need China’s assistance, but China is in a win-win scenario, so they get to benefit no matter what happens.
China’s assistance will come at a price. And that’s a price dictated by a leader that has a good (bad?) track record of dictating.
Xi didn’t have to do much to keep up his side of the bargain (though it is worth remembering that we won’t be privy to agreements made behind closed doors). He praised Putin—but not too much—and promised bipartisan coordination in the United Nations Security Council. Such words are easy to deliver and incur no binding costs. Then there were vague promises of working together in the IT sector and in international trade.
And that was pretty much it.
Putin, on the other hand, raised himself from his genuflection and proceeded to bend over backward for his guest. He probably still remains in the Kremlin somewhere, contorted into a Gordian knot of his own doing, awaiting the slice of a Ukrainian sword. (If only a trident could slice…)
Putin has promised to complete the Power of Siberia 2 pipeline, delivering more gas to China via Mongolia. That and more has been pledged in the name of providing uninterrupted oil and gas to China. You might be forgiven for thinking that this arrangement would be for the benefit of the seller, Russia. But, given sanctions and price caps, China is able to demand low prices (and has already done so) such that the revenues Russia is and will be receiving for the hydrocarbon exports are significantly lower than their previously budgeted expectations.
Back in January, it was calculated that Russia was losing €160 million ($175 million) per day in lost oil revenues with a further €120 million ($130 million) per day expected in further refined goods. But though they are able to sell oil and gas to countries like China and India (notwithstanding Russia’s need for far more gas infrastructure expenditure), these nations are shrewd operators and they know it is a buyer’s market.
This then means that Russia is almost entirely dependent on China for its fossil fuel industry and, at the moment, this works entirely in China’s favor. As Business Insider reports:
Russia will increasingly be a commodities warehouse for China as Moscow grows more economically dependent on Beijing, a source close to the Kremlin told the Financial Times….
After Putin launched his war, the West largely cut off Russia from the global financial system and shunned its energy exports, forcing it to reroute its oil and gas to China and India.
Indeed, Chinese purchases of Russian energy jumped 54% to $81.3 billion last year, accounting for 40% of the Kremlin’s budget revenue. And in January, Russia exported 2.7 billion cubic meters of natural gas to China, becoming its top supplier, according to data cited by the FT.
“The logic of events dictates that we fully become a Chinese resource colony,” the source told the FT. “Our servers will be from Huawei. We will be China’s major suppliers of everything. They will get gas from Power of Siberia. By the end of 2023, the yuan will be our main trade currency.”
That a Russian source sees their nation as merely a “resource colony” shows how far Russia have fallen: from empire to vassal state.
In addition to these pledges, Putin has declared that there will be a reorientation of agricultural trade in the direction of China. Moreover, China will play an important role in developing the far east and high north of Russia. This is particularly significant because it is an area and move that Russia’s own security services have been highly resistant to.
Perhaps this is a foreshadowing of China’s aforementioned assistance they would offer Russia in light of a Kremlin defeat. Also note how Russia is not offered a role in developing an of China’s regions.
But it doesn’t stop there.
Putin has also offered to begin using the Chinese Yuan in transactions with countries outside of the West. Over recent years, we have seen the development of BRICS: a group of nations that are looking to provide an alternative to the US political and economic hegemony. Brazil, Russia, India, China, and South Africa are a motley crew with big intentions but very different capabilities. One idea has been to develop a common currency that would act as a foil to the US dollar.
However, in January, and perhaps as a snub to the group they are in, Brazil’s Lula announced that they and Argentina were to start the ball rolling for developing their own common currency for trade.
When it comes to Russia’s promises, this will largely, perhaps only benefit China. If it ever happened, the Ruble would suffer. Again, there was no hint of the Ruble being used for anything. “It’s my way or the highway (to hell),” implies Xi.
To decorate the generous cake, Putin also offered Chinese entities access to the assets of Western companies who have left Russia as a result of the war. This is to strengthen Chinese corporate and national interests and not Russian.
The Russian Federation appears to be carving up its own internal organs and offering on a platter to the nearby tiger.
It appears that Xi has got everything he wanted from Putin, but this doesn’t look like the case for Putin. Though deals might have been done in secret, there is no sign that meaningful military assistance will be coming from China. Even the modest drone supply from China is taking place through third-party channels, through individuals and organizations: such assistance is not (apparently) coming directly from the Chinese state.
Even given all of these concessions to China, Xi’s diplomatic support of Russia’s war effort is still muted at best. Putin has singularly failed to tame or ride the tiger. Instead, it is more interested in sniffing the puddle of oil in the farmyard next door.
When the best that Xi’s rhetoric can muster is that the two nations are “friendly neighbors and reliable partners connected by shared mountains and rivers,” you have to start wondering whether Putin has been hoodwinked into ceding his family heirlooms to the wily trickster next door.