China CNN 02/10/2022 02:38
China will not do more than just words of support for its northern neighbor
- Trade between China and Russia accounts for only 2% of the total volume of Chinese trade
- The Chinese economy is in a fragile state which gives less incentive to tie China’s fortunes to Moscow’s
- China’s current economic relations with Russia do not justify Beijing’s risking a violent response from Washington and its allies
Russia has one obvious ally to turn to as geopolitical sparks with the West fly over Ukraine.
But don’t expect China to do more than just words of support for its northern neighbor If the United States and Europe pursue threats to hit the Russian economy if Moscow launches an invasion of Ukraine.
Beijing’s diplomatic and military ties with Moscow may be strong, but its economic allegiances are more complex.
Russian President Vladimir Putin met his Chinese counterpart Xi Jinping on Friday as the Winter Olympics kicked off in Beijing.
The Kremlin described the meeting as warm and constructive, and the leaders agreed to deepen their cooperation, according to an account published by the official Xinhua News Agency.
China, which has its own tensions with the West, has already expressed diplomatic support for its ally. In a joint statement issued on Friday after their meeting, Xi and Putin said the two sides oppose “further enlargement of NATO.”
Russia fears that Ukraine may join the alliance.
There is already some evidence that tensions with the West have deepened cooperation between China and Russia, according to Alexander Gaboyev, senior fellow and head of the Russia division of the Asia-Pacific Program at the Carnegie Center in Moscow.
He referred to arms deals, joint development of weapons, and an “increased number of joint exercises” between the two powers.
But it is not clear to what extent this could extend to deeper economic cooperation in the face of the expected harsh sanctions against Russia
Russia is highly dependent on China to trade, but this is not the case in the opposite direction. And the Chinese economy is already in a fragile state, giving Xi less incentive to tie his country’s fortunes to Moscow’s in the event of a military crisis.
Russia needs China for trade but the latter has other priorities, as it accounts for 16% of the value of its foreign trade According to CNN Business calculations based on 2020 numbers from the World Trade Organization and Chinese customs data.
But for China, the importance of Russia is much less: trade between the two countries made up only 2% of the total volume of Chinese trade.
The European Union and the United States have much larger stakes, and “Beijing should be very careful about getting into a NATO-Russia conflict over Ukraine,” says Alex Capri, a research fellow at the Heinrich Foundation.
China’s current economic relations with Russia, including its energy needs, do not justify Beijing’s risking further isolation and a backlash from Washington and its allies.
This could come back to haunt Beijing later as Western authorities realize the stakes are high for China as well.
Last month, US Secretary of State Anthony Blinken warned Beijing that an invasion of Ukraine would create “global security and economic risks” that could harm China as well.
And the Chinese economy is already suffering, which could make it difficult for Beijing to deepen ties with Moscow — or even deliver on promises it has already made, such as the recent agreement to boost trade between the two countries to $200 billion by 2024. That is approximately 50 billion US dollars.
The International Monetary Fund expects the Chinese economy to grow by just 4.8% this year, down from 8% in 2021.
The real estate crisis and lower consumer spending have lowered the growth rate.
Singleton said the escalating crisis in Ukraine would “certainly shock” the energy and mineral markets, throwing a heavy toll on the global economy.
This kind of emergency, along with China’s strict non-proliferation policy, “could accelerate an already rapid economic slowdown.”