China May Be the Ukraine War’s Big Winner

A year ago, the Chinese leader Xi Jinping told Ukrainian President Volodymyr Zelensky that, in the words of Beijing’s official readout, “China always stands on the side of peace.” But China was standing nowhere near the recent Swiss-sponsored international summit that convened to seek a peaceful resolution to Russia’s war against Ukraine. China’s conspicuous absence was made even more glaring by the great show that Beijing has made of mediating a settlement between the combatants.

Xi’s excuse was that all parties were not properly represented at the summit—in other words, the Russian party, which had not been invited. His relationship with Russian President Vladimir Putin has grown too close for anyone to expect the Chinese leader to be taken seriously as a peacemaker. Any hope that Xi might use his influence with Putin as leverage to help bring an end to the war evaporated long ago. Instead, the focus in Western capitals is now turning to the role that China is actually playing in the conflict—as facilitator of the Russian war effort. In that, the United States and its allies face a distressing reality: A protracted war in Europe suits Xi’s interests just fine.

Xi is, in effect, freeloading off the very U.S.-led global-security system he hopes to destroy, in order to replace it with a China-centric world order. He can leave the heavy lifting of solving the Ukraine crisis to Washington while exploiting it for China’s interests. Right now, this approach looks as effective as it is cynical.

If Putin prevails in his war, Xi has a partner who will have scored a victory against the hated West and promoted the global power of authoritarian regimes. Even if Putin fails to secure such an outright triumph, Xi will have helped Russia drain the U.S. and its allies of military and financial resources, while pulling Putin’s weakened but resource-rich country closer into China’s orbit.

Xi and his government don’t acknowledge their contribution to the brutal, 28-month war. Officially, Beijing still promotes the need for peace talks. But Xi’s actions say something very different. The leaders of the G7, at their summit this month, charged that China’s support for Russia was “enabling” Moscow to continue the war and called on Beijing to stop sending components and equipment that could end up in Russian weapons.

“Chinese support for Russia would make the war longer,” Zelensky said earlier this month during a visit to Singapore, “and that is bad for the entire world.”

Policy makers still believe that China has not been supporting Putin’s war directly, by supplying weapons to Russia’s armed forces. Zelensky recently revealed that Xi had promised him personally that Beijing would not sell weapons to Putin. But China can’t evade responsibility for aiding Putin indirectly, by propping up the sanctioned-plagued Russian economy.

Total trade between the two countries reached a record $240 billion in 2023, an increase of 26 percent compared with the previous year. China’s exports to Russia have surged by 64 percent since 2021, before the war in Ukraine began. Much of their trade is conducted in the Chinese currency, the yuan, rather than in U.S. dollars—the world’s principal reserve currency, still used for most international transactions. China’s financial sector has developed a Russian ruble–Chinese yuan payments system to bypass international banking’s SWIFT network, from which some Russian banks have been banned by the West’s sanctions.

For Russia, this trade has become a lifeline. Chinese goods account for 38 percent of all Russian imports, while China buys 31 percent of total Russian exports. China has purchased nearly half of Russian crude-oil exports since the European Union embargoed them in 2022. In a March report for the Atlantic Council, a Washington, D.C.–based think tank, Kimberly Donovan and Maia Nikoladze of its Economic Statecraft Initiative argued that China has created an “axis of evasion” in the oil market through its purchases from sanctioned Russia (as well as from Iran). “Oil revenue from China is propping up the Iranian and Russian economies and is undermining Western sanctions,” they wrote.

The importance of China’s economic support cannot be overstated. “Beijing’s decision to keep doing business with Moscow,” Alexandra Prokopenko, a fellow at the Carnegie Russia Eurasia Center, wrote last month, “has saved the Kremlin from economic and political disaster.”

So far, Xi has gotten away with all of this at little cost, to either China or himself. That impunity may be changing. The G7 countries have threatened to impose additional sanctions targeting Chinese financial institutions and other businesses that help Russia obtain war matériel. Already, last month, the Biden administration slapped sanctions on Chinese companies that it believes are helping Russia rebuild its military supplies.

Such actions may not be enough to compel Xi to alter his position. There’s a good chance that sanctioning China could produce the opposite effect, convincing Xi that a partnership with Putin to overcome American global power is the right course for China. From his perspective, China has too much to gain from fostering deeper ties to Russia. Xi is securing badly needed oil supplies and other natural resources beyond Washington’s lengthy reach (in contrast with Middle East sources, which could be vulnerable to U.S. sanctions or military action). Last year, Russia was China’s top foreign supplier of oil, accounting for nearly a fifth of total Chinese imports.

For Xi, withdrawing or curtailing support for Russia might hold greater risk than building a closer connection. China has a strong interest in Russia’s political and economic stability. Anything that might jeopardize that status quo—such as retreat or potential defeat in Ukraine, let alone a descent into economic crisis or political chaos in the Russian homeland (as briefly seemed possible when a mutinous Wagner Group marched on Moscow last year)—could present a major security threat along China’s long northern frontier.

The more reliant Russia becomes on trade with China, the more leverage Xi holds over Putin, and the more he can press Moscow to support Beijing’s global ambitions and interests. Xi apparently plans to extract whatever he can from Putin, who has few other options. A major pipeline deal between the two countries called Power of Siberia 2 has stalled because Moscow is balking at the steeply discounted gas price that Beijing is demanding, but Xi can afford to be patient.

Above all, Xi’s support for Russia is part of a much larger, long-term geopolitical strategy to remake the current world order dominated by the U.S. and its allies. Xi sees Putin as a crucial partner in his campaign to build an alternative bloc of developing countries that China can lead against the Western powers. For Xi, that goal may seem too big and important to set aside in order to resolve a far-off war in Europe. If anything, Xi’s incentives run in the other direction—and he gains by sustaining the Russian economy and prolonging Putin’s war. That way, Xi gets to create trouble for the U.S. and its European partners and bind Putin closer to him, with minimal risk to China itself.

This is the same approach that Xi is taking toward the Gaza crisis. Beijing has been trumpeting its support for the Palestinian cause to woo adherents in the Arab world, blaming U.S. policy for the turmoil, but then relying on Washington to lead negotiations for a resolution. Similarly, in the Red Sea, Xi has refused to cooperate with the U.S. and its partners to restore order after the Yemen-based Houthi militants disrupted international commerce by attacking crucial shipping routes. In all of these situations, Xi is willing to tolerate, even tacitly foment, instability that creates difficulties for the U.S. and at the same time capitalize on it to portray China as the more responsible global power that can offer superior solutions to the world’s problems.

Xi’s policies are realpolitik at its coldest. The most significant payoff may come in Ukraine. Wars are supposed to have no winners, but the power-hungry and unscrupulous can take advantage of suffering to forward their own interests. Beijing could be a big winner from Kyiv’s pain.

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