Could the Ukraine Crisis Benefit China?

The impact of the Ukraine crisis on the geopolitical order in Europe and beyond is clear. Although China is not directly involved, many Western observers believe that it is the biggest winner from the crisis. The argument is that Western sanctions mean Russia will move closer to China while the United States has to shift its attention back to Europe, thus moderating its rebalancing efforts to counter a rising China. Ultimately, the argument goes, this creates a new strategic opportunity for Beijing.

The impact of the Ukraine crisis on the geopolitical order in Europe and beyond is clear. Although China is not directly involved, many Western observers believe that it is the biggest winner from the crisis. The argument is that Western sanctions mean Russia will move closer to China while the United States has to shift its attention back to Europe, thus moderating its rebalancing efforts to counter a rising China. Ultimately, the argument goes, this creates a new strategic opportunity for Beijing.

Analysts like John Mearsheimer who hold this view tend to focus on signs of closer Sino–Russian relations. A 30-year gas deal, arms deals, joint naval exercises in the Mediterranean, a currency swap agreement, complimentary stances on strategic issues and a propensity to provide each other political support in front of Western critics all seem to point in that direction. These analysts then conclude that a ‘soft’ Sino–Russian alliance is coming to target the United States intentionally.

These arguments are flawed. There is still strategic distrust between the two powers. In addition, China has refused to compromise on its principles of non-interference and sovereignty by supporting Russia’s annexation of Crimea.

Yet a more fundamental mistake is that these analysts underestimate the China–Ukraine relationship. It is problematic to say China and Russia are moving closer due to the crisis if Beijing has not altered its cooperation with Kiev. While China–Ukraine relations appeared frozen at the height of the crises, they have now begun to warm up with increasing signs of exchange and cooperation in economics, trade and other strategic areas.

Between March and May 2015, officials from Ukraine and China signed off on a loan-for-grain deal worth US$3 billion and a bilateral currency swap worth around US$2.4 billion. In the first half of 2015, Ukraine replaced the United States as China’s top corn exporter. There has also been discussion about possibly co-producing a series of new Ukrainian military aircraft in China.

Some question whether Beijing abandoned Kiev. The Ukraine crisis did put Beijing in a dilemma: both Russia and Ukraine are its strategic partners. Some observers assume that a rational choice was to stand with Moscow, but this underestimates the importance of Ukraine in Beijing’s calculations. Apart from shared economic interests, Ukraine is more willing to sell advanced weapons and share sensitive technology with China than Russia.

Abandoning Ukraine may never be an option for China, although a short period of stagnation is possible. While Beijing is usually active in evacuating its civilians from restive situations, that did not happen in Ukraine. Chinese investors, most of which are state-owned enterprises, remained.

After years of social and political instability, Kiev needs trade and investment to rebuild its national economy and China is ready to export infrastructure development projects under the One Belt, One Road initiative. Senior diplomats from both nations have expressed their willingness to cooperate under the initiative. All this indicates that China and Ukraine are ready to restore and improve their bilateral relations.

Many observers also argue that China sided with Russia in the Crimean crisis. They then raise the possibility that Russia may support China’s sovereignty claims in the East China Sea and South China Sea in return. However, this is questionable.

Russia definitely has more strategic significance than Ukraine in Beijing’s eyes, yet Beijing is not ready to change its non-interference principle for Russia. In a joint communique on the establishment of diplomatic relations in 1992 and again in subsequent statements, China clearly recognised Crimea as under Ukraine’s sovereignty. Backing down from this stance would hurt China’s credibility and antagonise the West.

There are multiple reasons why Beijing supports Moscow beyond Ukraine. Both China and Russia face Western criticisms for their domestic politics and human rights record, and both see the United States as the top potential security threat. Due to a lack of legitimacy from democratic elections or a widely accepted ideology, Chinese leaders are sensitive to real or imaged external threats, which generates strong incentives to help an isolated Russia.

Sino–Russian cooperation after the crisis is asymmetric. Simply put, Russia needs China more than China needs Russia. Putin has paid exorbitantly to please Beijing. In addition to the gas deal, Moscow has given key infrastructure projects to Chinese investors and agreed ‘in principle’ to sell Beijing some of its most advanced weapons. Putin’s offer can only create a temporary boom in Sino–Russian relations. Meanwhile seeds of distrust and resentment are taking root in the Kremlin due to Beijing’s refusal to admit Russia’s sovereignty over Crimea and ambiguity on other key issues.

In addition, just as China remains ambiguous on Crimea, Russia is unlikely to take sides in China’s maritime disputes. Russia has long served as the most important partner of India and Vietnam in national defence. Chinese leaders must remember that during the China–India border disputes in the 1950s, the Soviet Union stood with India, which contributed to the collapse of the Sino–Soviet alliance. In the 1980s, Vietnam, backed by the Soviets, threated China’s border security from the south.

Moreover, while Russia has disputes with Japan over the Kuril Islands/Northern Territories, it probably will not go as far as to antagonise Tokyo. In the long term, the Kremlin will develop its economic interests with Tokyo to avoid economic overreliance on China. It is possible that Beijing sees Russia’s involvement in East Asian security as unhelpful and counterproductive, considering that, it raises uncertainty and closer ties with Russia exacerbate Western suspicions of China’s strategic intentions.

Some argue that the Ukraine crisis signals a closer Sino–Russian strategic partnership, which could potentially undermine the United States’ position. However, China–Ukraine relations are actually warming up and they will probably continue to do so. With this in mind, it is inaccurate to say China sides with Moscow or is the biggest winner from the Ukraine crisis.

Why the West is wrong about Beijing and Kiev is republished with permission from East Asia Forum