Business / Finance

Opinion: China At Crossways

Once this war is over, the only problem for Russia will be the one where it very quickly becomes a vassal to China.

Mar 07, 2022 | By Michel Santi
Image: Denys Nevozhai/Unsplash

China has been deeply shocked by the butchery that the Russian economy has suffered. The leaders of China — at every level — are terrified to fall victim to such strangulation. The West has steadfastly realised that its almighty power of globalisation is — by all accounts — a weapon that it alone wields. This is why some US politicians are now seriously considering cutting China off if it continues to be seen taking on an arrogant and expansive position. And this is why other hawks — perceiving the West to be strong, no longer fearful, and having united so quickly — even believe it possible to exploit a China that is now at the very least in deep trouble and recognise Taiwan.
China must now make a decision, that could turn out to have serious consequences for it, for a war it did not foresee. Or it didn’t think would happen, nor did it take seriously the secret reports that were sent by the US warning of an imminent invasion of Ukraine by Russia. This China, that had previously reached a point of absolute defiance against America and everything it stands for, has not been able to fully appreciate the major ramifications of this war instigated by Putin because China and Russia have grown much closer over the last few years. It’s probably in light of this close personal proximity between Xi Jinping and Putin that the latter’s cocksure attitude toward his punitive expedition in Ukraine should be understood. Many times in the recent past had the two leaders declared — and reaffirmed — the partnership between their two nations that they said was “without limitation, without no-go zones, and without finish lines”.

Image: Zhang Kaiyv/Unsplash

While the West is coming out of this front clearly rejuvenated, bolstered, and united by an unprecedented boldness, the reactions — just like the absence of reactions — from China are being closely scrutinised. Will China fall further into its autocracy? Xi widely shares Putin’s views when it comes to Western civilisation and both of them have been predicting its decline. So will Xi launch himself head-first into establishing a new world order and stability he would lead in concert with his colleague Putin? At present, a choice must be made, when it is precisely now — right now — that Putin needs China the most, but China’s room for manoeuvre is smaller than ever since it has so much to lose. Just a tenth of the sanctions that have been imposed on Russia would in effect wipe out all of the gains China can make out of the Russia’s economy.
The fact is that these two economies are completely unable to integrate because China would not make a worthwhile profit from it due to the miniscule size of the Russian economy, the difference between the two being comparable (to cite Paul Krugman) to the size of Italy’s economy against Germany’s during the era of the Axis that united them in the 1930s. As Russia’s number one trade partner, China towers over the country with the size of its industry, its exports, and its GDP, and therefore really doesn’t have any interest in alienating the giants of Europe and America for the sake of a Russia that is insignificant in economic and financial terms. Once this war is over, the only problem for Russia will be the one where it very quickly becomes a vassal to China.

Michel Santi

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