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Eurasianet

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Russia's Ukraine Invasion Is Bad News For China’s Belt And Road Ambitions

  • China has taken a particularly tepid stance on Russia, with leaders in Beijing looking to hedge their bets. 
  • This war has been very bad for Beijing’s business, tossing a monkey wrench into Xi’s Belt and Road vision.
  • Moscow’s Ukraine misadventure has forged the very geopolitical environment, namely Western strategic unity, that China desperately wanted to avoid

Since the start of Russia’s invasion of Ukraine, China has said all the right things in support of Russia, its professed strategic partner. Chinese officials have faithfully repeated Russian propaganda, refusing to describe the unprovoked attack on Ukraine as a “war” or “invasion,” while echoing the Kremlin claim that NATO’s expansionist desires are the root cause of the conflict.

But Beijing’s actions are telling a different story, underscored by the March 9 Foreign Ministry announcement that the Chinese Red Cross is supplying almost $800,000 in humanitarian assistance to Ukraine. The amount is small, but the gesture is significant in the current context: Chinese leaders are hedging their geopolitical bets.

It was just over a month ago that Russian leader Vladimir Putin met with his Chinese counterpart, Xi Jinping, at the opening of the Beijing Winter Olympics. The two issued a joint statement describing bilateral relations as “superior to political and military alliances of the Cold War era,” and cooperation as having “no limits.”

Since the start of the war in Ukraine, however, China’s behavior toward Russia has been circumspect and restrained, its officials proclaiming solidarity with Russia without following up in substance. Before Russian troops attacked, Chinese officials spoke against Western sanctions. But once the United States and European Union started imposing sanctions and disconnecting Russian banks from the SWIFT financial network, leading Chinese financial institutions began quietly adhering to the restrictions, according to the Bloomberg news service.

Another section of the February 4 Putin-Xi statement offers insight into China’s “say one thing, do another” approach toward Russia: The two countries endorsed a “need for consolidation, not division of the international community, a need for cooperation, not confrontation.” It goes on to say the two “oppose the return of international relations to the state of confrontation between major powers.”

Just weeks after publication of these sentiments, Putin decided unilaterally to blow up the post-World War II order, ushering in a new era of geopolitical confrontation that may prove just as fraught as the Cold War. Putin’s impulsive actions are also fueling a Western economic crusade against Russian-style illiberalism.

Xi likely feels embarrassed and used by Putin, and Chinese officials similarly can’t help worrying that, given the West’s restored unity of purpose, China’s global economic interests and geopolitical aspirations stand to suffer. It’s no surprise, then, that Beijing has been a vocal proponent for an end to the war. This conflict is very bad for Beijing’s business, tossing a monkey wrench into Xi’s Belt and Road vision.

The economic disparity in China’s relationship with Russia is another factor behind Beijing’s tepid response to Russia in the Kremlin’s time of extreme financial need. When it comes to commerce, Russia is an afterthought for China, accounting for merely 2 percent of Beijing’s overall trade turnover. To the extent that Beijing increases its trade volume with Russia amid the stifling Western sanctions, it will do so while imposing humbling terms on its supposed friend, purchasing energy, for example, at bargain-basement prices.

China’s strategic partnership with Russia was useful to Beijing only to the extent that it could widen the gap between the U.S. and EU, thus creating space for continuing Chinese economic expansion. This underlying pillar of the partnership has now come crashing down: Putin’s Ukraine adventure has forged the very geopolitical environment, namely Western strategic unity, that China desperately wanted to avoid. Virtually overnight, Russia has gone from asset to major liability for China.

Though unarticulated, the message that Xi is sending Putin with China’s evident reluctance to toss Russia an economic lifeline is: “It’s nothing personal, it’s strictly business.”

By Eurasianet.org

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Leave a comment
  • DoRight Deikins on March 12 2022 said:
    Thanks for an interesting and different view. I always appreciate your different perspective.

    But I view it differently, seeing many of those things listed as positives to Chairman Xi. For instance, they adhere to the SWIFT sanctions, because that forces Pres. Putin into the 'Yuan as an international currency' camp.

    Putin has been making too many friends and playing the foil to those whom Xi would like to have no 'close' friends but him.

    Yet, be that as it may, the Chinese are consummate gamblers and they know how to wait. They like to cover all their bets and never put all their eggs in one basket.
  • Mamdouh Salameh on March 12 2022 said:
    I fail to see how the Ukraine conflict is bad for China’s Belt and Road Initiative (BRI). The BRI is China’s grand strategy of helping developing countries finance and modernize their infrastructure and start wealth-creation projects and in so doing open huge opportunities for China’s economy and get it integrated deeper into the global trade system.

    If China is providing great benefits to developing nations many of whom could neither afford to finance their infrastructure or projects on their own nor would they be able to get soft loans from Western Financial Institutions, does anyone think that they would refuse China’s financial help because of its support of Russia? This is stretching the imagination far beyond reality.
    And while Russia is the junior partner in the economic and trade sense in its strategic alliance with China, it is definitely the leader of the alliance in the military sense.

    Still, Russia’s economic trade with China has surged from $13 bn in the early 2000s to over $150 bn in 2021. China’s increasing imports of Russian oil, gas and coal look set to provide Russia with the much-needed finance to weather the global storm of sanctions against it.

    Moreover, the economies of both China and Russia complement each other to a great extent. China, the world’s largest economy based on purchasing power parity (PPP, is wedded to Russia, the World’s superpower of energy. Also China, the world’s largest importer of food can get all its needs from Russia, the world’s largest producer and exporter of wheat and food materials.

    Furthermore, China and Russia continue to work closely to enhance the petro-yuan in the global oil market at the expense of the petrodollar with the ultimate objective of undermining the US economy and weakening the dollar’s impact on the global economy.

    However, Russia’s strategic alliance with China goes far beyond the BRI and trade relations. It is about ushering a new multipolar world order.

    China is bound to benefit handsomely from the Ukraine conflict. Russia’s ultimate attainment of its strategic objectives in Ukraine and security goals vis-à-vis the United States and NATO in Europe will strengthen the Chinese-Russian strategic alliance.

    Three major issues occupy China’s strategic thinking: Energy Security, Economic growth, Taiwan and a multipolar world order.

    The strategic Chinese-Russian alliance enables China to deal efficiently with these three issues.

    China’s tacit support of Russia in Ukraine and its ability to help Russia withstand Western sanctions will eventually get a quid pro quo from Russia when the time comes for China to restore Taiwan to the Mainland.

    The Ukraine conflict is but one manifestation of the ongoing transformation of the world order from a unipolar under the leadership of the United States to a multipolar one being ushered by the Chinese-Russian strategic alliance.

    Dr Mamdouh G Salameh
    International Oil Economist
    Visiting Professor of Energy Economics at ESCP Europe Business School, London

Leave a comment




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