Russian President Vladimir Putin met his Chinese counterpart Xi Jinping on Friday as the Beijing Winter Olympics kicked off. The Kremlin described the meeting as warm and constructive, and the leaders agreed to deepen their cooperation, according to an account published by Chinese state news agency Xinhua. Russian oil giant Rosneft said it had agreed to boost supplies to China over the next decade.
Those risks may be formidable should Russia invade Ukraine. Moscow has denied that it has any intention of doing so.
China — which has its own tensions with the West — has already expressed diplomatic support for its ally. In a joint statement issued Friday after their meeting, Xi and Putin said both sides opposed “further enlargement of NATO.” Russia fears Ukraine may join the alliance.
“Xi almost certainly believes there is a strategic interest in supporting Russia,” said Craig Singleton, senior China fellow at the DC-based Foundation for Defense of Democracies. He pointed out that China “remains at permanent loggerheads” with the United States.
There is already some evidence that tensions with the West have deepened cooperation between China and Russia, according to Alexander Gabuev, senior fellow and chair of Russia in the Asia‑Pacific Program at Carnegie Moscow Center. He cited arms deals, the joint development of weapons, and an “increased number of joint drills” between the two powers.
But it’s not clear how far that would extend to deeper economic cooperation in the face of harsh sanctions. Russia depends deeply on China for trade, but that’s not the case the other way round. And the Chinese economy is already in a shaky spot, giving less incentive to Xi to tie his country’s fortunes to Moscow’s in the event of a military crisis.
“It would be a ‘win’ for Putin if Xi simply hews closely to China’s stated desire for a diplomatic resolution to the crisis, as it implies that Putin’s grievances are legitimate,” Singleton said. “Beyond that though, China may be hard pressed to truly deepen its economic ties with Russia, at least any time soon.”
Russia needs China for trade. China has other priorities
“Beijing needs to be very cautious about wading into a conflict between NATO and Russia over the Ukraine,” said Alex Capri, a research fellow at the Hinrich Foundation. “China’s current economic ties with Russia, including its energy needs, don’t warrant Beijing risking further alienation and backlash from Washington and its allies. This could come back to haunt Beijing later.”
Singleton said that an escalating crisis in Ukraine would “almost certainly shock” energy and metals markets, thus weighing heavily on the global economy. That kind of emergency, coupled with China’s strict zero-Covid policy, “could hasten China’s already rapid economic slowdown.”
There are limits to Beijing’s help
A strong relationship with China would likely only mitigate rather than neutralize the impact of Western sanctions on Russia, according to Capri of the Hinrich Foundation.
And there are some problems that China can’t really help with at all, he added.
The Chinese yuan is “nowhere close to being sufficiently internationalized to compete with the US dollar,” Capri said, noting that the dollar plays a critical role in both SWIFT and also the trading of commodities such as oil and gas, the “lifeblood of Russia’s economy.”
Analysts at Eurasia Group wrote in a report last week that Beijing could redouble efforts to build a yuan-denominated payment system, which might allow it to do business more freely with countries that have been sanctioned by the West without using dollars or euros.
Even so, they wrote, companies in both China and Russia “still prefer to denominate trade in freely convertible currencies,” meaning that any efforts to reduce Western influence would be “more aspirational than substantive.”
Recent history isn’t in Russia’s favor. After Russia invaded and annexed Crimea in 2014, the country pivoted to China for support as it was slapped with economic sanctions.
“China is the senior partner in the bilateral relationship,” wrote the Eurasia Group analysts in their recent report, pointing out that the economy is about nine times larger than Russia’s. “It is likely that Beijing wants to shape Moscow’s calculus to its advantage.”