Opinion | As Biden blasts Putin in Poland, President Xi may turn Ukrainian crisis into an opportunity
"The world wants peace in Ukraine. If nothing else, the Russian invasion is causing havoc in the global economy. Inflation was already rearing its ugly head well before the conflict. But, as Western sanctions intensify against Russia…If the West has nothing to offer Russia but the stick, China may provide the carrot for peace." SCMP Editorial.
By Augustus K. Yeung
Introduction
The United States as a world hegemony is used to sanctioning opponents and rivals since it emerged victorious after World War II. China had been sanctioned before during the Korean conflict. It has survived. China now knows that the US-led sanctions would not get their expected effects, except that they hurt the consumers and certainly not the regime.
Based on this prior experience, China knows that America's sanctions, though expansive, would still not be effective, especially this time when Germany and China badly need natural gases from Russia.
Therefore, Western sanctions would not work, although China feels strongly for the Ukrainian people whose homes have been broken, lives lost, and millions of them have become refugees. As a statement from the Chinese foreign ministry says, "It is not something that we want to see."
Not joining the sanctions, does not mean China is doing nothing about it; it is just that Beijing strongly opposes Washington's way of throwing its weight around, and threatening its rival as always. Threats won't work.
China prefers to resort to diplomatic channels, or better still through the backdoor which has proven to be effective.
"China is Being Affected Like Everybody Else"
The world wants peace in Ukraine. If nothing else, the Russian invasion is causing havoc in the global economy. Inflation was already rearing its ugly head well before the conflict. But as Western sanctions intensify against Russia, the prices of oil, wheat and other commodities have been pushed through the roof, translating into higher costs for consumers. China is being affected like everybody else. But it is in a unique, if difficult position in that it could help Russia, a declared close partner, to ease economic pains from the sanctions while playing a role in peace mediation. Amid slowing growth, policymakers in Beijing have some highly complicated calculus in geopolitics, oil trade and economic, both global and domestic, to work through.
Rising commodity prices may start to filter through in China even though inflation has been under control in recent months. Oil prices have sounded a red alert about the increasing risk of imported inflation. In this regard, cheap oil from Russia may look attractive. However, it presents myriad problems in the current hostile environment between Moscow and the West. In the short run, China's ability to accept more Russian oil is limited, despite or because of British and American sanctions.
Retaliation from Washington Will Push Russia Closer to China
Since the start of the war in Ukraine, some Chinese oil refiners have started using cash transfers to maintain seaborne crude imports from Russian's Far East. However, Chinese spot buyers of Russian crude have reportedly refrained from closing deals temporarily. Uncertainty, from cargo shipping bottlenecks to fears of retaliation from Washington, have made them cautious.
Despite a bilateral initiative to use more yuan and rouble, most transactions are still conducted in US dollars.
Major Russian banks have been cut off from Swift, the international messaging system for money transfer. While China has developed the Cross-Border Interbank Payment System (CIPS), it will take time for Russian oil suppliers to adjust or even accept wholesale transactions in yuan.
Still, both countries have high incentives to make the oil trade work. Russian was China's second largest crude oil supplier last year, and has become experienced in absorbing cheap oil from Iran and Venezuela by circumventing US-led sanctions against them.
Similar moves will push the Russian economy closer to China. China has called for ceasefire talks between Ukraine and Russia and rightly warned that the Western-led sanction could hurt the world economic recovery from the pandemic.
If the West has nothing to offer Russia but the stick, China may provide the carrot for peace.
(Source: "China has key role to play as sanctions on Russia fuel inflation". Editorial. South China Morning Post. Monday, March 28, 2022)
Conclusion
That China and Russia are going on brothers and that their friendship has "no limits" is an established fact: If Russia cares about this close relationship, it would try its best to close a deal with Ukraine as soon as possible-- so as not to put China in the double bind, as Beijing is caught between two friends of China hurting each other, ethnic Slavic friends, Russia and Ukraine; and China, too, is running the high risk of being sanctioned by the U.S. and its allies.
Therefore, the conflicting pair should come to their senses and work a way out. Most likely Ukrainian political neutrality is the expected outcome, now that Russia has essentially achieved its goal of demilitarizing Ukraine by bombing the arsenal depots and controlling the nuclear plants.
In this conflict, President Putin has been demonized out of proportions by Western media. Now is the time to show his noble character for a friend who has pledged "no limits" to their partnership. My bet: Putin won't take advantage of his hard-earned friendship with Xi Jinping.
Meanwhile, President Xi Jinping's special envoy is reportedly on his way to Moscow…
The Western world will get to know Beijing better: China will substantially contribute in ways economically beneficial and agreeable to both Russia and Ukraine in the areas of trades and infrastructures and more, ultimately ushering in a millennium of peace and prosperity.
The author is a freelance writer; formerly Adjunct Lecturer, taught MBA Philosophy of Management, and International Strategy, and online columnist of 3-D Corner (HKU SPACE), University of Hong Kong.
The views do not necessarily reflect those of DotDotNews.
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