https://www.chathamhouse.org/publication/twt/why-china-winning-war-ukraine
December 2015, Volume 71, Number 6
Author: Stephen Blank, Senior Fellow at the American Foreign Policy Council
Moscow may have done the fighting, but Beijing is reaping the rewards
Almost two years after the start of the conflict in Ukraine, it is clear that China, not Russia, is the real victor. This assertion may strike readers as bizarre since China’s vital interests are not engaged in this war, nor does it participate in any of the negotiations.
Nevertheless this judgment is already unassailable. Russia may have won some territory and grievously wounded Ukraine but it has incurred terrible economic and political costs. And many of its losses have been China’s gains.
Such a situation – where a non-combatant power wins the spoils of war – is not unprecedented. In the light of European history, Prussia was the real victor of the first Crimean war (1853-56), though it did not fire a shot. Prussia profited from the Crimean war’s weakening of the post-Napoleonic order to unify the German states into an empire that changed the balance of power in Europe.
In Asia, China’s gains are most apparent. Following the return of Shinzo Abe to power as prime minister, Japan and Russia were heading for a rapprochement. An important element in this was and is the two governments’ shared apprehensions about China’s growing power in Asia. But because of Russia’s seizure of territory in Ukraine, Washington has brought considerable pressure to bear on Tokyo to join, however reluctantly, in the sanctions against Moscow. In October 2015, despite Tokyo’s long courtship of Russia, Japan announced that President Putin would not visit the country in 2015.
China’s direct gains are even more visible in economic relations with Russia and in Central Asia. The terms of a Russo-Chinese energy deal of May 2014 have remained a secret but it is widely believed that China will obtain gas at cost price, hardly an economic gain for Russia. In July the two governments said that they would not sign a second gas deal later this year despite previously agreeing to do so.
Thus Russia must build and pay for a pipeline to one customer which has a decided advantage over Russia and dim-inishing need for its gas. This is clearly a losing strategy.
While China is still Russia’s largest trading partner, the level of bilateral trade has fallen this year, though Russia’s trade with other countries has declined further, making China’s relative position stronger.
A flood of Russian articles has extolled how much China is investing in Russia, but statistics tell a different story. Thanks to Russia’s miserable investment climate and worsening economy, Chinese investment in Russia fell 25 per cent in the first half of this year. China’s slowing economy and stock market losses also betoken a period of less outward investment and willingness to take risks in Russia. The risks of investing in Russia for Chinese businesses due to the US and western sanctions on Russia have also greatly inhibited the flow of Chinese trade and capital.
So while the partnership is real, much of what is coming out of Moscow or Washington concerning Russia’s ‘turn to China’ is either exaggerated for domestic effect or based on short-term and poorly informed analysis.
Most tellingly, in May 2015 Moscow accepted that the Russian-led Eurasian Economic Union and Russia’s own programmes for transcontinental trade between Europe and Asia by the Trans-Siberian railway and other heralded transport projects would be integrated with the Chinese Silk Road concept of ‘One Belt, One Road’. Apparently Moscow did so in return for Chinese promises of investment in large-scale Russian infrastructure plans.
Since the Eurasian Economic Union had as one of its original goals blocking Chinese economic penetration of Central Asia, Russia has in effect given up on competing economically with China, as well as its other dreams of major transcontinental trade projects. While these projects may be built, they will clearly be subordinated to China’s strategic designs.
This outcome further cements China’s economic and political pre-eminence in Central Asia. Indeed, some Russian com-mentators now invoke the importance of Russia’s role there as the guardian of Chinese investments. Russian military action in the region may indeed be needed, in the light of the terrorist threat from the Islamic State group and Moscow’s long-standing pessimism about Afghanistan’s viability.
The costs of its Ukraine adventure are now rolling in, not least in the most strategic sectors of the Russian economy where Moscow must sell off key assets to sustain its pretence of being a major Asian and energy power.
We are also likely to see China’s ascendancy over Russia in the arms trade; it is increasingly likely that Moscow will revise its policy of not selling to China defence systems that are better than those it sells to India. If Russia, as expected, sells the Lada-class submarine, Su-35 Fighter, and S-400 air defence system to China, it will break that rule because it needs China more than it needs India, and certainly more than China needs Russia.
Finally, as a result off the crisis in Ukraine, US and allied attention has been diverted from China’s steady encroachment upon the islands and territorial claims of other Asian nations in the South China Sea.
Even under the best of circumstances it would be difficult to organize a coherent multilateral response to this systematic encroachment upon those territories and efforts to exclude foreign energy and military installations from the South China Sea. But thanks to Washington’s automatic budget cuts – known as sequestration – that have reduced defence spending and the allied preoccupation with Ukraine, almost nothing has been done and China essentially enjoys a free hand here.
There is little doubt that China will study this war to learn how to advance its own interests and military strategy using the three kinds of warfare deployed in Ukraine – military, legal and psychological. It will surely also use this opportunity to continue to supplant Russia in Central Asia, gain enduring leverage within the Russian economic-political system, subordinate Russia to its East Asian designs and seek to obtain critically needed energy, military, and other assets at what amount to bargain-basement prices.
Yet Russia, despite the exploitation of its difficulties, has no choice for now but to remain beholden to Beijing for support and investment in the absence of any from the West.
For a power with no vital interests at stake in Ukraine, these are enormous gains. The war in Ukraine represents not just a threat to European security but a threat to international order, and just as Prussia’s gains came in 1864-70 through the final rupturing of the post-Napoleonic European concert.
China, if it decides to make a move, may well upset the regional balance of power, just as Prussia did in Europe. And we ignore the repercussions of this process whereby China is increasingly supplanting and subordinating Russia, albeit not without signs of Russian resistance, at our peril. - See more at: https://www.chathamhouse.org/publication/twt/why-china-winning-war-ukraine#sthash.elDqA1l9.dpuf
December 2015, Volume 71, Number 6
Author: Stephen Blank, Senior Fellow at the American Foreign Policy Council
Moscow may have done the fighting, but Beijing is reaping the rewards
Almost two years after the start of the conflict in Ukraine, it is clear that China, not Russia, is the real victor. This assertion may strike readers as bizarre since China’s vital interests are not engaged in this war, nor does it participate in any of the negotiations.
Nevertheless this judgment is already unassailable. Russia may have won some territory and grievously wounded Ukraine but it has incurred terrible economic and political costs. And many of its losses have been China’s gains.
Such a situation – where a non-combatant power wins the spoils of war – is not unprecedented. In the light of European history, Prussia was the real victor of the first Crimean war (1853-56), though it did not fire a shot. Prussia profited from the Crimean war’s weakening of the post-Napoleonic order to unify the German states into an empire that changed the balance of power in Europe.
In Asia, China’s gains are most apparent. Following the return of Shinzo Abe to power as prime minister, Japan and Russia were heading for a rapprochement. An important element in this was and is the two governments’ shared apprehensions about China’s growing power in Asia. But because of Russia’s seizure of territory in Ukraine, Washington has brought considerable pressure to bear on Tokyo to join, however reluctantly, in the sanctions against Moscow. In October 2015, despite Tokyo’s long courtship of Russia, Japan announced that President Putin would not visit the country in 2015.
China’s direct gains are even more visible in economic relations with Russia and in Central Asia. The terms of a Russo-Chinese energy deal of May 2014 have remained a secret but it is widely believed that China will obtain gas at cost price, hardly an economic gain for Russia. In July the two governments said that they would not sign a second gas deal later this year despite previously agreeing to do so.
Thus Russia must build and pay for a pipeline to one customer which has a decided advantage over Russia and dim-inishing need for its gas. This is clearly a losing strategy.
While China is still Russia’s largest trading partner, the level of bilateral trade has fallen this year, though Russia’s trade with other countries has declined further, making China’s relative position stronger.
A flood of Russian articles has extolled how much China is investing in Russia, but statistics tell a different story. Thanks to Russia’s miserable investment climate and worsening economy, Chinese investment in Russia fell 25 per cent in the first half of this year. China’s slowing economy and stock market losses also betoken a period of less outward investment and willingness to take risks in Russia. The risks of investing in Russia for Chinese businesses due to the US and western sanctions on Russia have also greatly inhibited the flow of Chinese trade and capital.
So while the partnership is real, much of what is coming out of Moscow or Washington concerning Russia’s ‘turn to China’ is either exaggerated for domestic effect or based on short-term and poorly informed analysis.
Most tellingly, in May 2015 Moscow accepted that the Russian-led Eurasian Economic Union and Russia’s own programmes for transcontinental trade between Europe and Asia by the Trans-Siberian railway and other heralded transport projects would be integrated with the Chinese Silk Road concept of ‘One Belt, One Road’. Apparently Moscow did so in return for Chinese promises of investment in large-scale Russian infrastructure plans.
Since the Eurasian Economic Union had as one of its original goals blocking Chinese economic penetration of Central Asia, Russia has in effect given up on competing economically with China, as well as its other dreams of major transcontinental trade projects. While these projects may be built, they will clearly be subordinated to China’s strategic designs.
This outcome further cements China’s economic and political pre-eminence in Central Asia. Indeed, some Russian com-mentators now invoke the importance of Russia’s role there as the guardian of Chinese investments. Russian military action in the region may indeed be needed, in the light of the terrorist threat from the Islamic State group and Moscow’s long-standing pessimism about Afghanistan’s viability.
The costs of its Ukraine adventure are now rolling in, not least in the most strategic sectors of the Russian economy where Moscow must sell off key assets to sustain its pretence of being a major Asian and energy power.
We are also likely to see China’s ascendancy over Russia in the arms trade; it is increasingly likely that Moscow will revise its policy of not selling to China defence systems that are better than those it sells to India. If Russia, as expected, sells the Lada-class submarine, Su-35 Fighter, and S-400 air defence system to China, it will break that rule because it needs China more than it needs India, and certainly more than China needs Russia.
Finally, as a result off the crisis in Ukraine, US and allied attention has been diverted from China’s steady encroachment upon the islands and territorial claims of other Asian nations in the South China Sea.
Even under the best of circumstances it would be difficult to organize a coherent multilateral response to this systematic encroachment upon those territories and efforts to exclude foreign energy and military installations from the South China Sea. But thanks to Washington’s automatic budget cuts – known as sequestration – that have reduced defence spending and the allied preoccupation with Ukraine, almost nothing has been done and China essentially enjoys a free hand here.
There is little doubt that China will study this war to learn how to advance its own interests and military strategy using the three kinds of warfare deployed in Ukraine – military, legal and psychological. It will surely also use this opportunity to continue to supplant Russia in Central Asia, gain enduring leverage within the Russian economic-political system, subordinate Russia to its East Asian designs and seek to obtain critically needed energy, military, and other assets at what amount to bargain-basement prices.
Yet Russia, despite the exploitation of its difficulties, has no choice for now but to remain beholden to Beijing for support and investment in the absence of any from the West.
For a power with no vital interests at stake in Ukraine, these are enormous gains. The war in Ukraine represents not just a threat to European security but a threat to international order, and just as Prussia’s gains came in 1864-70 through the final rupturing of the post-Napoleonic European concert.
China, if it decides to make a move, may well upset the regional balance of power, just as Prussia did in Europe. And we ignore the repercussions of this process whereby China is increasingly supplanting and subordinating Russia, albeit not without signs of Russian resistance, at our peril. - See more at: https://www.chathamhouse.org/publication/twt/why-china-winning-war-ukraine#sthash.elDqA1l9.dpuf
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