China has never condemned Russia for its annexation of Ukraine's Crimean peninsula, its war against Ukraine's eastern Donbas region that has killed more than 5,000 people or the Kremlin's hand in the July shootdown of the Malaysian Airlines jet, killing 298 people.
The world’s most populated nation, with 1.4 billion people, and the second largest economy, with more than $10 trillion in gross domestic product, also shows no willingness to join Western sanctions to punish Russia.
The Chinese government, with its authoritarian rule, aggressive foreign policy and flagrant human rights violations, may be one of the last nations to criticize Russia for similar transgressions.
Instead, China sees opportunities to make more money. Chinese investment in Russia more than doubled in 2014, to $8 billion, with some big bilateral deals taking place.
The Kremlin needs Beijing more than ever, while China is exploiting the West-Russia rift for its benefit, said Alexander Gabuev, senior associate at Carnegie Moscow research Center.
“The Ukrainian crisis was the game changer,” Gabuev said. “As the West is sanctioning Russia, Russia has not many places to go, both internationally and in Asia. China is definitely the lifeline that could help the economy and the regime to get additional funds and capital sources, new market for hydrocarbons and new technology.”
China sees Russia as a source of raw materials – 70 percent of the $41.6 billion in Russian goods send to China in 2014 were energy resources.
Jeff Schubert, an expert at the Shanghai Institute of International Financial Center, told the Kyiv Post that China doesn’t want to do anything that destabilizes the Kremlin.
While official Beijing talks cautiously about “supporting Ukrainian integrity,” the heavily state-controlled Chinese media talk about understanding the Russian position and generlly blame the West.
As for Ukraine, Schubert said: “I would certainly not expect China to say ‘we will support you against Russia’.”
But Ian Bremmer, president of the Eurasia Group, a U.S.-based political-risk consultancy, said China also willl moderate its support of Vladimir Putin so as not to antagonize the West. “Moscow can offer Beijing long-term energy supplies and help China contain the U.S. in Asia. But Europe, America and Japan will remain China’s largest trade partners for the foreseeable future,” he wrote.
Russia and China joined Brazil, India and South Africa in the so-called BRICS partnership to create a New Development Bank with $50 billion in subscribed capital by July. It is meant as an alternative to the World Bank.
Jonathan Holslag, an expert on China from the Free University of Brussels, said that “China will use its vast foreign exchange reserves to the benefit of its trade and industrial interests. With the bank, China gives the impression to India, Russia, and Brazil that they can also influence the investment priorities, but in practice China will call the shots.”
China’s deals with Russia include a $400 billion agreement for construction of a pipeline to export gas to China. Russa’s state-owned Gazprom dropped its price to China. While the pipeline costs $55 billion, gas supplies are priced at $350-380 per 1,000 cubic meters.
Kyiv Post staff writer Olena Gordiienko can be reached at [email protected].
