Anjani Trivedi

Just How Exposed Has Russia’s War Left China?

What role can China play in de-escalating the war between Russia and Ukraine? Is Beijing’s relationship with Russiaheightening global tensions and what, if anything, can the US do to lower the temperature? President Xi Jinping has not been cheering his counterpart Vladimir Putin’s invasion of Ukraine, but neither has he condemned it. Bloomberg Opinion’s Anjani Trivedi hosted a Twitter Spaces discussion on the issue with fellow columnist Shuli Ren and editorial board member Nisid Hajari. This is an edited transcript.

Anjani Trivedi: Since Russia invaded Ukraine, there have been no signs that sanctions have pulled it back. What is China’s position?

Shuli Ren: On the one hand, China said it respects national sovereignty, without saying whether it’s Russia’s or Ukraine’s. On the other hand, it talked about wanting to provide humanitarian support to Ukraine, and for this military conflict to stop. They did not even use the word “invasion” or “war” — just military conflict. So China’s position is very unclear. I think that’s what’s agonizing the White House, because economic sanctions are only as strong as the weakest link. China can provide a lot of financial support to Russia to help it survive the economic sanctions.

Trivedi: How much could Beijing provide and how could it help Russia beyond outright military support?

Ren: Russia has a huge foreign exchange reserve, but half of it is in the US dollar or the euro. Russia has $130 billion worth of gold and it has a large amount of Chinese government bond holdings, too. The first thing China could do is to say “I will buy some of that gold off of you and repay you in dollars.” China can be the lender of last resort. If Russia runs out of money, it can say, “I’m going to establish a currency swap line with you,” which China did after Russia annexed Crimea in 2014. China could also buy a lot of Russia exports like oil, natural gas, wheat and fertilizer.

Trivedi: Do you think China has made a mistake in showing so much support for Putin?

Nisid Hajari: China is caught in a position now where they’ve committed to supporting not just Russia, but Vladimir Putin. So much of this is based on the personal relationship between Xi and Putin. China needs the US and Europe far more than it needs Russia in terms of its economy, technology, finance and so on. At the very least you can say that it can’t afford to completely alienate Europe, in particular. I think China has made a calculation partly based on not just the past year, but the past several years of tensions with the US China feels they’re faced with unremitting hostility from the US and so they need strategic allies like Russia. I see why it would appeal, but by committing so openly and strongly to Russia, it does limit their scope of action. I think they may be regretting that.

Trivedi: Is Chinese social media purely focused on a pro-Moscow stance, and does that create support around Xi Jinping?

Ren: China has become a very divided society. If you look at social media, of course people will be a little bit more careful. I’m actually surprised by how extreme the two sides of the views are. Some people are very pro-Moscow. They blame the war on the expansion of NATO. Some people have expressed a lot of sympathy for Ukrainian citizens. They talk about citizens joining the army to defend their country. The fear of secondary sanctions is creating a lot of economic anxiety in China, too. The nation relies on its strong manufacturing exports. They’re afraid that European companies will just stop buying Chinese goods. It’s not just a one-sided view that’s pro-Russia. And also, Chinese people have never quite trusted the Russians. They’re always very suspicious of what Russia really wants.

Trivedi: I was reading the Stephen Kotkin interview in The New Yorker — he talks about how this is a way for China to know the costs it has to pay if European private companies start canceling you out like they canceled Russia.

Hajari: I think the US is deeply invested in this crisis, and if China were to overtly try to contravene US sanctions, the Biden administration would have to take action, whether it wanted to or not.

Trivedi: Has the way this has played out made a Chinese invasion of Taiwan more or less likely?

Hajari: You could read this two ways: If you look at what’s happening in Ukraine, it’s an argument against trying to invade Taiwan. Look at the trouble Russia has had tactically on terrain that is much friendlier than the strait between the mainland and Taiwan. They basically just rolled across the border on flat ground with columns of tanks. China would have to stage amphibious landing across 80 miles (128 kilometres) of sea on an island that’s decently well-defended and getting better defended. In Ukraine, Russia knew that NATO forces would not intervene, whereas the US has left it ambiguous as to whether it would intervene or not in a Taiwan crisis. Any Chinese commander would have to at least plan for the worst case scenario, which would be intervention by the US, and probably Japan and Australia. Even if somehow you got through all that, in Taiwan, you’ve got this incredibly mountainous terrain. It could be a very bloody insurgency, which is to say, not that China would never do it, but everything that you’ve seen happen in Ukraine should be a reminder of how difficult this can be, especially with a military that’s not combat tested. The last time the Chinese fought was in 1979.

Trivedi: What do you think are the largest financial and economic threats of cutting off China?

Ren: China is already becoming too big to be sanctioned. We have seen that sanctioning Russia — which is much, much smaller than China — already hurts the West. Having the US and European Union sanction China is almost impossible right now. They are China’s largest buyers and together account for 35% of Chinese exports.

Trivedi: How much damage has been done so far in Russia’s relations with Europe and China’s relations with Europe? Has Russia’s actions deepened the issues between the US and China?

Hajari: The damage has been substantial. You see the visceral reaction in Europe to Russia’s actions. To look at China being portrayed as Russia’s biggest patron is quite damaging to their long-term reputation. And they can change this. If China was willing to put a degree of pressure on Putin in order to find some face-saving way out, and then participate in a multilateral peace process between the US, EU, Ukraine and Russia, you could see China somehow playing a helpful role and getting credit for it. But they haven’t shown any indication thus far that they’re prepared to play that role, that they want to take the risk of trying to push Putin if they’re not certain he will go along with it. China’s natural inclination is to try to keep their head down, not renounce their ties to Putin and not get blamed for what’s happening. Every day that China doesn’t play a more helpful role, its credibility in Europe and the US diminishes further.

Trivedi: Do you think there’s a chance the US can play an effective role here in a diplomatic way by driving a wedge between China and Russia, as it did three decades ago in 1972?

Hajari: It’s something that’s hard to see happening in the short term and possibly in the medium term, but it’s not something you should rule out in the long term. Strategically speaking, the last thing you want to do is push your two greatest enemies together. You should be trying to try to split them apart — there are many ways in which China’s interests diverge from Russia’s. They may at the moment feel like they’re in the same camp because of the hostility they perceive from the US and Europe. But long term, China has to decide if it wants to hitch its wagon to this unpredictable and disruptive player on the global stage. And one that is undermining the stability that’s been underpinning China’s rise for years.

Can China somehow have its desire for a greater say in that global order met without overturning it and without supporting people like Vladimir Putin? These differences between China and Russia are real, and that’s part of the reason why China is struggling right now with how to behave and what actions to take.