• Recently from The Signal: Martin Raymond on what it means that tens of trillions of dollars are now moving from the Baby Boomers to the Millennials and Generation Z.
• Today: How has the war in Ukraine affected the alliance between Russia and China? Sergey Radchenko on great-power politics, Moscow’s growing energy exports, and Beijing’s new sway.
• Also: Alice Han on popular discontent in Iran with the regime and its leaders …

Trust, but Verify

Still, Russia’s war in Ukraine has tested the “new paradigm.” In February 2022, shortly before the invasion, Xi and Putin declared that their countries’ partnership had “no limits.” But Moscow didn’t consult Beijing before invading, and Beijing hasn’t used the rhetoric since. After the attack, the West imposed unprecedented economic sanctions on Moscow and gradually cut off nearly all Russian exports of oil and natural gas to Europe and North America—forcing the Russian Federation’s economy to rely more and more on the People’s Republic. What’s the war done to this critical partnership?

Sergey Radchenko is the Wilson E. Schmidt Distinguished Professor at the Johns Hopkins University’s School of Advanced International Studies and the author of several books on China-Russia relations. As Radchenko sees it, the course of the war has meant increasing gains for China, both economic and strategic. It’s saved billions buying discounted oil from Russia—while finding a high-demand market there for its cars, phones, semiconductor chips, and machine tools. Russia’s growing economic dependence on China has transformed the Russian Federation into a client state of the People’s Republic, enhancing its status as a great power. As the war continues indefinitely, Beijing holds more and more leverage over Moscow—though short of the leverage to dictate the Kremlin’s conduct of the military campaign in Ukraine.

At the same time, Radchenko says, China has remained officially neutral in the Ukraine war and even put forward a peace plan. That plan is unrealistic, but it allows Xi to relentlessly criticize the U.S. and its allies as fueling conflicts in Europe and the Middle East. And yet the battlefield stalemate in Ukraine is China’s preferred scenario today. It doesn’t want Russia to lose ground but fears any escalation in fighting—above all, that one side or the other might resort to nuclear weapons.

“Russia knows it’s reliant on China—and it understands why: Fundamentally, the reliance is economic. And the reason for this economic reliance is that Russia’s torched its bridges with the West, cutting itself off from Western markets. So it had no choice but to turn to the East. The Russians have tried to compensate for their loss of access to Western markets by importing dual-use technologies from China—items that can be used to produce civilian or military goods. That’s been a blessing for them.”

“Trade between Russia and China has increased dramatically. Last year, it was about US$240 billion, which is enormous. If you look at the structure of that trade, it’s all largely from Russia redirecting its exports of oil and gas to China—and then importing technologies and machine tools from it. As a result, about 25 percent of Russia’s external trade is now with China. And that’s a big percentage.”

“The Chinese leadership isn’t particularly happy about the invasion. But that doesn’t mean they want Russia to lose. They don’t, because Russia losing would be bad for them; it would mean that the Western-led order had triumphed—and that China might be next.”

Build Your Dreams

In February, Alice Han explored how the Chinese auto manufacturer BYD had managed to surpass Tesla as the world’s best-selling electric-vehicle brand in the last three months of 2023. In Han’s view, BYD has a number of advantages over Tesla: generous government subsidies; cheaper labor and battery costs; and an enormous Chinese market, often favoring domestic products. And yet, Han says, the company’s future—along with the EV market’s globally—is uncertain, on account of a wave of protectionist measures around the world, as well as rising competition from legacy automakers.

Sent your way? Sign up here.

This email address is unmonitored.

Please send questions or comments here.

To advertise with The Signal, inquire here.

Add us to your address book.

Subscribe here.

© 2024