Ramzy Ezzeldin Ramzy
Former Egyptian Ambassador and Senior UN official.

China and the Ukrainian Crisis

How the Ukrainian crisis unfolds and ultimately ends may well shape the future of the international system. That will depend also on who will emerge stronger from the conflict.

Will it be Russia or the US and its allies? What is clear however is that Ukraine and its people will be the greatest losers. Ultimately there will be a political settlement in which both sides of the conflict will sell as a victory. The reality may be different. Regardless of how the final outcome will be sold by the protagonists, the likely winner could very well be China. That is if Beijing decides to use its influence in a judicious and timely manner to find a settlement to the conflict.

So far Beijing has played its cards very close to its chest. The result is that its real position concerning the crisis in Ukraine is subject to much speculation.

China’s public pronouncements have been equivocal. While it has not supported outright Russia’s military intervention in Ukraine, it has demonstrated an understanding of the Russian motivation for doing so. Nowhere is this better reflected than at the United Nations where Beijing has opted to abstain from all the resolutions that condemned Russia.

Beijing is treading a very thin line: it is trying to balance between its respect for the principles of the United Nations Charter and its political and strategic interests.

Even on the matter of principle, it faces a dilemma. On the one hand, it has every interest in upholding the fundamental principle of respecting the territorial integrity of states given that it is facing secessionist forces in both Tibet and Xinjiang. On the other, there is the issue of Taiwan where it faces a different challenge. Taiwan is regarded by Beijing as a renegade province that ultimately needs to be reintegrated into the mainland, if necessary by force.

In terms of political and strategic interests, China might find it to its advantage that the crisis in Ukraine, specifically, and Europe generally, will divert the West’s efforts to stall China’s rising power.
In fact, there is speculation that President Xi Jinping was informed of Russia’s intentions by President Putin during their Summit on 4 February. The fact that the invasion took place a short while after the summit and, the statement, while avoiding the issue of Ukraine, declared that Chinese -Russian cooperation “ had no limits “ if anything confirms Beijing’s equivocal stance.

What is obvious in the statement, however, is that Beijing and Moscow share the same strategic objectives: ending US dominance of the international political and economic systems.

What is less obvious is how either Russia or China approaches this strategic partnership. Beijing views Moscow as its junior partner. Moscow probably understands that the most it can achieve is parity.
While the crisis in Ukraine may not have come at a worse time for Beijing, it may -if properly utilized- serve its strategic interests.

On the one hand, it is argued that China has everything to lose from a prolonged crisis in Ukraine. Beijing was in an upward trajectory towards its objective of being the world’s biggest economy ( in fact it has achieved that in tens of purchasing power parity ) and moving the international system to a multipolar one.

Yet in reality, China still has some way to go to be the dominant economic power. Nowhere is this more apparent as the continuation of the US dollar as the international reserve currency. Since 2008, the dollar’s share in the foreign-exchange reserves held by central banks has declined only marginally, from around 65 percent to 60 percent. Moreover, the three next most popular reserve currencies are issued by the European Union (21 percent), Japan (6 percent) and Britain (5 percent). Meanwhile, only 2 percent of global foreign exchange is held in renminbi. The ruble and crypto languish below 1 percent.

On the other hand, a weakened Russia may well serve China’s interests, in the sense that confirms the former as the junior partner in the relationship. Yet a greatly weakened Russia undermines China’s strategic objectives. Russia remains the indispensable ally in China’s quest for undercutting US dominance of the international system. No configuration of allies, without Russia, will provide China with sufficient power to secure its strategic goal. So the challenge for Beijing is how to manage an outcome in which Moscow is bruised but not defeated.

So where do China’s real interests lie? On the one hand, it has benefited from the economic system dominated by the west, but it is not as yet powerful enough to tinker with it in any substantial manner. Already before the crisis in Ukraine, it has been trying to address the challenges posed by the recent policies pursued by the US and its allies in reshaping their economic relationship with China, including by reducing its reliance on the dollar and the western banking system.

What is also most concerning, and should be even more so for China, is how the conflict in Ukraine is being framed by both the US and its allies on the one hand, and Russia on the other. The West is framing it as a conflict between the liberal democratic West against the autocratic East of which China is the other main part. In other words an ideological war. And as history demonstrates, ideological wars can last for generations. Meanwhile, Moscow is presenting the conflict as an existential one, implicit in that position is that it will stop at nothing to ensure an outcome favorable to its interests. These are the seeds for a protracted conflict that China needs to avoid.

The longer the crisis in Ukraine lasts the more disruptive its effects will be on the international economic system that has brought enormous benefits to China. Beijing, therefore, has every interest to bring the crisis in Ukraine to a speedy end so as to ensure that the tactical advantages it derives from the present international system serve its strategic objectives. The issue then becomes whether it will decide to play an active role in this regard. This can take place in an obvious and straightforward manner or from behind the scenes.

In these circumstances, it makes every sense that China may find it in its interest to play the role of the mediator. If it opts not to do so, it will risk one of the following outcomes: a prolonged conflict that would disrupt the economic system that has brought enormous benefits to it, an ideological war that will perforce suck it in; or a greatly weakened Russia that will deprive it of a critical ally in reshaping the international system. All such outcomes undermine its strategic interests.

While there are various mediations going on, the Turkish and the Israeli are ostensibly the most prominent. Both may help prepare the ground for serious negotiations, but neither country possess enough clout to push Moscow to offer any concessions that make a settlement possible. The only capital that Moscow may be prepared to take its views into account is Beijing.

Both the US and its allies and Russia understand that a prolonged conflict in Ukraine carries enormous risks. They probably would welcome a mediator that would provide a face-saving formula that would end the conflict. They also appreciate that no one is better placed than China to do exactly that. The fact that the US is threatening China not to support Russia, maybe a tactical ploy to push Beijing to mediate the conflict.

For this reason, but more importantly for China’s self-interest, Beijing’s intervention in finding a settlement in Ukraine is therefore likely. The question is therefore at what juncture does Beijing decide to intervene. It will most likely do so, only when it asses that Moscow is ready to reach a settlement. But for that to happen that may require a little nudge from Beijing.