4th March 2022
China’s difficult balancing act in Russia–Ukraine crisis
China’s inconsistent messaging on Russia’s invasion of Ukraine reveals a difficult balancing act for Beijing, as it attempts to adhere to long-held principles while serving the interests of a valuable strategic partner. Meia Nouwens assesses Beijing’s competing considerations in navigating the crisis.
Russia’s invasion of Ukraine came only days after the conclusion of the Winter Olympics in Beijing, and only three weeks after Russia and China issued a joint statement outlining their deepening partnership and shared vision for the global order. It is unclear, however, exactly to what extent Beijing was informed about Russia’s move on Ukraine or whether Beijing had anticipated the global diplomatic, economic and indirect military pushback to it. Beijing’s changing narrative shows that it is struggling to balance its policy options.
The West’s swift and surprisingly united response to Russia’s actions will give Beijing food for thought regarding its own plans for Taiwan, even though Ukraine and Taiwan are not entirely comparable case studies. Given the upcoming 20th Party Congress this autumn, 2022 will be the year that Beijing, more than ever, requires stability at home and in its international relations. It seems thus far that this is becoming increasingly difficult.
Similarly, while Beijing has avoided any language that criticises Russia for its invasion, it has oscillated between suggesting that Russia has security concerns that justify its actions, to directly accusing the US of instigating the war. At the Munich Security Conference, China’s Foreign Minister Wang Yi noted that Russia had ‘reasonable security concerns that should be taken seriously’. In a similar vein, Foreign Ministry Spokesperson Hua Chunying in her press conference on 23 February pointed to the need for ‘all sides’ to stop ‘stoking panic, or hyping up war’. Hua pointed specifically to the US as ‘pouring oil on the flame’, and undermining Russia’s security through ‘five waves of NATO expansion eastward all the way to Russia’s doorstep’. On 24 February, Hua went further to argue that the US instigated the conflict between Ukraine and Russia.
However, despite all this, on 26 February China did not exercise its veto of a draft UNSC resolution instructing Moscow to stop attacking Ukraine and to withdraw all troops immediately. Any hopes in the US and Europe – or Ukraine, which has asked China to mediate with Russia – that Beijing could influence Moscow’s actions towards Ukraine will be dashed. Beijing publicly deepened its relationship with Russia through a joint statement on 4 February, and continues to factor US–China competition into its foreign-policy decision-making. Certain Chinese government-affiliated think tank commentary exemplifies this.
There also seemed to be confusing instructions from China’s embassy in Ukraine to its citizens in the country. On 24 February, it instructed nationals driving through Ukraine to affix China’s flag to their cars. Two days later, it reversed its recommendation and urged its citizens not to reveal their identity, as the escalation in the conflict with Russia posed a security risk to Chinese nationals.
There should be little expectation that such statements, which have since been censored and removed from their original sources, will influence Xi Jinping. Some Chinese think tankers have in the last few years lamented restrictions on their work and, therefore, their effective inability to provide sound policy advice to the government.
Beijing now faces another challenge. How to respond to a strategic partner facing sanctions imposed against its central bank and political leadership and elites, a heavily devalued currency, and partially blocked participation in the SWIFT banking system. Beijing has already stated that it will maintain its normal tradecooperation with Russia, and in line with an agreement signed earlier in February has lifted all restrictions on importing Russian wheat. That relationship today is an important one: 17% of Russia’s total exports went to China in 2021, of which 66% were oil and gas exports. In response to the sanctions placed on Moscow in 2014, China was able to negotiate lower gas prices for imports from Russia. And the two countries signed a 30-year supply deal in January 2022. Chinese companies may find opportunity in this crisis.
There is speculation that China and India could seek to alleviate Russia’s expulsion from SWIFT, and increasingly trade with Russia in their own currencies. China operates a SWIFT alternative – the ‘Cross-Border Interbank Payments System’, or CIPS, which was announced in 2015 to facilitate the settlement of international payments in reminbi. Presently, 23 Russian banks are reported to be connected to CIPS. China has indicated that it would like a greater percentage of bilateral trade, including in oil and gas contracts, to be settled in Chinese yuan rather than other foreign currencies. And India is reportedly also considering whether to set up a rupee payment system for trade with Russia. However, as some experts have pointed out, CIPS still relies on SWIFT messaging within its system, and is thus not a perfect workaround. Furthermore, secondary sanctions or commercial sanctions on targeted sectors will make trading with Russia increasingly difficult, even for countries such as India and China.
While Beijing won’t base its decision on how to solve the ‘Taiwan problem’ based on timing that is convenient for Russia, it will take stock of messaging on Russia’s actions from like-minded countries, especially those expressing unity or will to take decisive political, economic or military actions, or to incur financial and economic costs as a result of such measures. The US, while pre-occupied with the ongoing war in Ukraine, has made a point of reminding Beijing that it is both committed to European security as well as to that of the Indo-Pacific region. The US reportedly sailed a destroyer through the Taiwan Strait, briefly crossing the Median Line, and has also sought to send a signal to Beijing that it continues to support Taipei through the visit of a delegation of former senior defence officials to Taiwan. Based on how liberal democracies have responded to Russia’s invasion of Ukraine, Beijing may have to factor in the possibility of similar responses to any Taiwan contingency.
The West’s swift and surprisingly united response to Russia’s actions will give Beijing food for thought regarding its own plans for Taiwan, even though Ukraine and Taiwan are not entirely comparable case studies. Given the upcoming 20th Party Congress this autumn, 2022 will be the year that Beijing, more than ever, requires stability at home and in its international relations. It seems thus far that this is becoming increasingly difficult.
What’s China’s official position?
Since the outbreak of conflict, Beijing has subtly changed the focus of its statements regarding Ukraine several times. This suggests that it is finding it difficult to adhere to one policy line that bridges its long-held principles of non-interference and territorial integrity and also shows support for Russia. On 26 February, Wang Yi published China’s official position on the Ukraine crisis, covering five points:- China maintains that all states’ (including Ukraine’s) sovereignty and territorial integrity should be respected and protected according to the UN Charter;
- China believes that the legitimate security concerns of all countries should be respected. Here, NATO’s expansion raised legitimate security demands in Russia;
- China doesn’t want to see the current situation in Ukraine, and all parties should exercise restraint;
- China supports a diplomatic resolution and peaceful settlement of the Ukraine crisis, and states that the Ukraine issue has evolved in a ‘complex historical context';
- China stands against the invocation of UN Charter Chapter VII that authorises the use of force and sanctions in United Nations Security Council (UNSC) resolutions, but believes that the UNSC should play a constructive role in resolving the Ukraine issue.
Similarly, while Beijing has avoided any language that criticises Russia for its invasion, it has oscillated between suggesting that Russia has security concerns that justify its actions, to directly accusing the US of instigating the war. At the Munich Security Conference, China’s Foreign Minister Wang Yi noted that Russia had ‘reasonable security concerns that should be taken seriously’. In a similar vein, Foreign Ministry Spokesperson Hua Chunying in her press conference on 23 February pointed to the need for ‘all sides’ to stop ‘stoking panic, or hyping up war’. Hua pointed specifically to the US as ‘pouring oil on the flame’, and undermining Russia’s security through ‘five waves of NATO expansion eastward all the way to Russia’s doorstep’. On 24 February, Hua went further to argue that the US instigated the conflict between Ukraine and Russia.
However, despite all this, on 26 February China did not exercise its veto of a draft UNSC resolution instructing Moscow to stop attacking Ukraine and to withdraw all troops immediately. Any hopes in the US and Europe – or Ukraine, which has asked China to mediate with Russia – that Beijing could influence Moscow’s actions towards Ukraine will be dashed. Beijing publicly deepened its relationship with Russia through a joint statement on 4 February, and continues to factor US–China competition into its foreign-policy decision-making. Certain Chinese government-affiliated think tank commentary exemplifies this.
There also seemed to be confusing instructions from China’s embassy in Ukraine to its citizens in the country. On 24 February, it instructed nationals driving through Ukraine to affix China’s flag to their cars. Two days later, it reversed its recommendation and urged its citizens not to reveal their identity, as the escalation in the conflict with Russia posed a security risk to Chinese nationals.
Criticism at home
Chinese media has expectedly toed the government line on the Ukraine crisis, pointing to the Ukraine ‘problem’, ‘conflict’, ‘issue’ or ‘situation’ – anything short of calling it a war or Russia’s actions as an invasion of a sovereign nation and violation of its territorial integrity. However, discontent with Putin and the Russian government has been voiced in China. On 28 February, five Chinese academics published a joint statement on Weixin stating that they were ‘strongly opposed to the war Russia started against Ukraine’. It continued, ‘the aggression against a sovereign nation with the use of force is tantamount to destroying the existing international security system, no matter what Russia says about the reason for doing so.’ Notably, the professors stated their position on the war, but did not indicate direct disagreement with the Chinese government’s reaction.There should be little expectation that such statements, which have since been censored and removed from their original sources, will influence Xi Jinping. Some Chinese think tankers have in the last few years lamented restrictions on their work and, therefore, their effective inability to provide sound policy advice to the government.
Other considerations for Beijing
China has criticised the sanctions imposed on Russia by European capitals, the European Union, the US and like-minded countries. Foreign ministry spokesperson Wang Wenbing has stated that China does not support the use of sanctions to solve the conflict and that they have no basis in international law. According to Wang’s statement, sanctions only create new problems and interfere with the political settlement of conflicts. But the collective response by the West and others (and in particular the strong participation in these measures by the business sector) will have come as a surprise to Beijing, which has leveraged disunity within the very same blocs to its own political advantage. Beijing might have assumed that Europe’s former disunity with regards to Russia would persist.Beijing now faces another challenge. How to respond to a strategic partner facing sanctions imposed against its central bank and political leadership and elites, a heavily devalued currency, and partially blocked participation in the SWIFT banking system. Beijing has already stated that it will maintain its normal tradecooperation with Russia, and in line with an agreement signed earlier in February has lifted all restrictions on importing Russian wheat. That relationship today is an important one: 17% of Russia’s total exports went to China in 2021, of which 66% were oil and gas exports. In response to the sanctions placed on Moscow in 2014, China was able to negotiate lower gas prices for imports from Russia. And the two countries signed a 30-year supply deal in January 2022. Chinese companies may find opportunity in this crisis.
There is speculation that China and India could seek to alleviate Russia’s expulsion from SWIFT, and increasingly trade with Russia in their own currencies. China operates a SWIFT alternative – the ‘Cross-Border Interbank Payments System’, or CIPS, which was announced in 2015 to facilitate the settlement of international payments in reminbi. Presently, 23 Russian banks are reported to be connected to CIPS. China has indicated that it would like a greater percentage of bilateral trade, including in oil and gas contracts, to be settled in Chinese yuan rather than other foreign currencies. And India is reportedly also considering whether to set up a rupee payment system for trade with Russia. However, as some experts have pointed out, CIPS still relies on SWIFT messaging within its system, and is thus not a perfect workaround. Furthermore, secondary sanctions or commercial sanctions on targeted sectors will make trading with Russia increasingly difficult, even for countries such as India and China.
Taiwan
While some analysts have stated that the current crisis in Ukraine has nothing to do with the Indo-Pacific, China and Taiwan will both be watching how the West responds to Russian aggression. As a result of the Ukraine crisis, a slogan has made the rounds in Taiwan: ‘今日乌克兰， 明日台湾’ (today Ukraine, tomorrow Taiwan) – echoing similar slogans following Beijing’s crackdown on protests in Hong Kong in 2020. Taiwan’s government has reported no unusual People’s Liberation Army movements since the war began, but has increased its alert level.While Beijing won’t base its decision on how to solve the ‘Taiwan problem’ based on timing that is convenient for Russia, it will take stock of messaging on Russia’s actions from like-minded countries, especially those expressing unity or will to take decisive political, economic or military actions, or to incur financial and economic costs as a result of such measures. The US, while pre-occupied with the ongoing war in Ukraine, has made a point of reminding Beijing that it is both committed to European security as well as to that of the Indo-Pacific region. The US reportedly sailed a destroyer through the Taiwan Strait, briefly crossing the Median Line, and has also sought to send a signal to Beijing that it continues to support Taipei through the visit of a delegation of former senior defence officials to Taiwan. Based on how liberal democracies have responded to Russia’s invasion of Ukraine, Beijing may have to factor in the possibility of similar responses to any Taiwan contingency.
