China needs to pick a side and it might be the West

For the Kremlin, its “partner of no limits,” China, isn’t doing enough to aid Moscow’s war against Ukraine. So, Russia has signed a peace treaty with North Korea, hoping to pressure China into backing its war effort further.

At the same time, the West sees China as far too helpful to Russia. That sentiment was best captured last month during a summit in Washington.

Heads of state and governments of NATO countries jointly proclaimed that China is a “decisive enabler” of Russia’s war against Ukraine, and also called on Beijing “to cease all material and political support to Moscow’s war effort.”

To the West, China’s aid, though short of actual weapons supply, is more than enough to fuel Russia’s war machine. This in turn poses a security threat to Europe.

But NATO’s message and Moscow’s implicit code to Beijing seem to indicate one thing – the days of sitting on the fence are numbered. China needs to choose a side. Unfortunately for Russia, it may be forced to pick the West.

Major democracies

Signs that Beijing is already pivoting have started to appear. Speculation was rife in late 2023 that China’s panda diplomacy was on the way out amid worsening ties with major democracies.

But this year, more pandas have been sent to Spain and Austria, as well as California, the tech center of the United States. President Xi Jinping also went on a European tour, while Premier Li Qiang made trips to Australia and New Zealand to mend ties with the West.

China knows that the war has had catastrophic consequences for Russia and Ukraine. Estimates indicate that Vladimir Putin’s conflict in the Eastern European democracy could cost Moscow US$1.3 trillion, and at least 315,000 in troop casualties.

So, win or lose, the post-war damage to Russia would be immense.

This is bad news for China. Not only will it have a weakened ally, but the West could then have a free hand to consolidate its resources in dealing with the “Chinese threat”.

This concern isn’t unfounded. After all, a substantial portion of Americans view the country as the greatest enemy of the US, and China is sometimes characterized as a member of an “axis of evil” alongside Russia, Iran, and North Korea.

So, Beijing needs to hedge itself against becoming the “target of all arrows,” as the famous Chinese saying goes, if Russia loses the war in Ukraine. Reviving panda diplomacy and state visits then become tools to mend ties with the West, and serve as insurance policies.

But NATO’s criticism last month echoes a similar statement by US Secretary of State Anthony Blinken in late April. He suggested that these soft power initiatives are insufficient to appease Western democracies.

Ailing economy

Beijing needs to press Moscow to sue for peace. With this, Russia gets to preserve its national strength, while China could concentrate efforts on being the world leader in Artificial Intelligence or AI, and healing its ailing economy.

For months, it has been reeling from a real estate crisis, a volatile stock market, a massive 288% debt-to-GDP ratio, as well as high youth unemployment.

Recently, Chinese government bond prices soared, suggesting that investors are seeking safer alternatives as confidence in the economy remains low.

But that isn’t the only problem the Communist Party government faces. It has traditionally employed economic performance to legitimize its rule. So given the poor climate, Beijing needs to jump-start its ailing economy to maintain power.

Yet, there is one major flaw with Beijing’s growth strategy – it centers around exports, which rely heavily on Western demand. While they have increased in various regions across the world, almost 30% of its exports in 2023 were meant for the US and the European Union.

As it stands, cracks are surfacing in Beijing’s blueprint. In May, Washington raised tariffs on Chinese electric vehicles, or EVs, to 100%. The EU followed suit by raising duties from 17.4% to 37.6% on top of an existing 10% tariff.

But things may get worse for the world’s second-largest economy depending on what it does with Russia. A day after NATO’s proclamation, US President Joe Biden announced that China’s continuous support of Russia will bear dire economic consequences.

He added that “some of our European friends are going to be curtailing their investment in China,” alluding to what Beijing might face if its support for Moscow’s war continues.

Permanent interests

For its own sake, Beijing is hoping that the conflict ends with a peace settlement that favors Moscow. Failing this, China’s sense of self-preservation will put its partnership of “no limits” with the Kremlin to the test.

After all, as the quote widely attributed to the 19th Century British Prime Minister Lord Palmerston goes, “There are no permanent enemies, and no permanent friends, only permanent interests.”

Chee Meng Tan is an Assistant Professor of Business Economics at the University of Nottingham in England.

This article is republished from The Conversation under a Creative Commons license. Read the original article here.

The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy of China Factor.