The results of the elections on the island will decide a lot
The uneasy relations between China and the West are increasingly on the world news agenda. The United States and Europe accuse Beijing of supporting the Russian special operation in Ukraine and demand to take the “right side of history”, including in terms of anti-Russian sanctions. China is responding politically and economically more and more sharply, transferring payments for the purchase of Russian energy from dollars to yuan. The US is escalating the situation around Taiwan by increasing its military aid.
It turns out that the policy of the collective West leads to a rapprochement between Moscow and Beijing. The question is how far is Beijing ready to go in support of Russia without fear of imposing secondary sanctions against itself? After all, he can lose the huge European and American markets? About this “MK” talks with a specialist in Asia and China, director of the Center for Comprehensive European and International Studies of the Higher School of Economics, candidate of political sciences Vasily Kashin.
– In 2014-2015, when the first round of sanctions pressure began, – says Vasily Kashin, – China has not yet had a confrontation with the United States. They then had a completely working relationship, although they slowly worsened. But even at that moment, China supported us.
– For example, in the provision of loans. Including some private companies, which allowed them to refinance their debt to foreign creditors. In 2014-2015, the influx of such loans from China amounted to $32 billion. These loans were not particularly favorable in terms of conditions, but then they helped solve many problems. Moreover, China provided these loans, despite strong pressure from the United States.
In May 2014, China, despite direct pressure from the United States, signed a contract with us for the supply of natural gas through the Power of Siberia-1 pipeline “. Beijing provided assistance to Russia in a number of other areas as well. For example, he supplied some components that Western companies stopped supplying to us. Or, let's say, he installed and laid an underwater cable for an energy bridge to the Crimea. There are many examples.
But at the same time, it's important to understand that China's largest companies, both public and private, are global. And they, of course, had to take into account the threat of secondary US sanctions.
– In China, 80% of the assets of the banking system are in four giant state-owned banks that operate around the world. In many countries there are their projects, representative offices, some subsidiaries … That is, a number of large Chinese global companies must take into account that one or another of their assets may be subject to freezing, some kind of sanctions if they violate the norms of American law.
< p>So, on the one hand, there was, of course, a problem of interaction – many Chinese companies were afraid to work in Russia. But on the other hand, there was the goodwill of the Chinese government. In principle, throughout this period, trade turnover in our country and the share of Chinese products in imports have been growing. Gradually, we came up with various payment options for those products for which it became problematic to pay in dollars. For example, a separate mechanism has been created for paying for deliveries within the framework of military-technical cooperation.
– Yes, indeed, China has undergone very serious changes in foreign policy since 2018. In 2014-2015, China had quite normal, pragmatic relations with the United States, and in 2018, under Donald Trump, they deteriorated sharply. Moreover, Trump, worsening these relations, did not act on his own, but expressed a bipartisan Republican-Democratic consensus. And when the Biden administration came to power, it only confirmed that in matters of relations with China, it would generally follow the same course.
Biden declared a new trade war against China and began to build up a military presence in the Pacific. He began to shake up the Taiwan problem, increased military activity in the South China Sea, and spoke disapprovingly of the “Chinese military-political regime.” That is, ideological clichés have already gone into the entrance.
In 2019, unrest occurred in Hong Kong, which further worsened US-China relations. Well, in 2020, sanctions pressure on China has increased dramatically.
– In addition to the trade war, which involved the imposition of discriminatory tariffs on a significant part of Chinese exports, hundreds of Chinese companies in 2020-2021, especially those related to high-tech sector, found themselves under sanctions of varying severity. This has created a new reality in which China finds itself in direct economic clash with the United States.
China had to respond to this pressure. There was an intensification of Chinese policy and, in general, a toughening of positions in international affairs. At the same time, China began to develop sanctions and counter-sanctions legislation. In 2021, the anti-sanctions law was adopted, which introduced responsibility for the enforcement of sanctions against Chinese companies in the PRC. By the way, we are just considering a similar law.
The adopted law required Chinese companies to report all cases when they are forced to comply with sanctions or imposed sanctions against them. Certain approaches to economic responses have been formulated. That is, China's position has changed a lot. Its relationship with the US has become confrontational.
In this confrontation with the US, China sees Russia as a key ally. He is not interested in things going badly for Russia, and is going to support her.
– I think he will not provide support in cases where it will directly harm China itself. That is, we will not be able to continue to cooperate with all Chinese companies. Those of them who are sitting on American technologies, patents, equipment – they will avoid direct contact with us. But in any case, now, in this new reality, the circle of our potential partners in China has become much wider.
The Shanghai Cooperation Organization (SCO) is an international organization founded in June 2001 by the leaders of China, Russia, Kazakhstan, Tajikistan, Kyrgyzstan and Uzbekistan. It now also includes India and Pakistan as permanent members. Observers in the SCO are Afghanistan, Iran, Mongolia and Belarus.
– The role of the SCO will apparently increase, since until the last moment Russia did not consciously promote or support economic cooperation within the framework of the SCO.
< p>– We feared that the economic component of the SCO, if it developed rapidly, would undermine our own project, namely the Eurasian Economic Union. Perhaps now this position will change. But we will soon see that.
On the other hand, it should be understood that the SCO in its current form is a clumsy structure. There is India and Pakistan, and Iran may also appear. Although, perhaps, in the conditions of the refusal of the dollar in mutual settlements, there may appear some options for multilateral economic cooperation.
– Until now, due to geography, we have always had not very close economic ties with India. With the exception of military-technical cooperation. Russia has been a major source of some technology for India. First of all, nuclear, energy related to national security. This was the basis of our relationship.
Russia helped re-equip the Indian Air Force with Su-30MKI multirole fighters. Today, the fleet of these aircraft is almost 300 aircraft.
The largest joint project is the development and production of BrahMos supersonic missiles (Brahmaputra-Moscow).
India bought the heavy aircraft-carrying cruiser Vikrmaditya (Admiral Gorshkov) from Russia, and also leases nuclear submarines.
Such relations are still very important, because the basis of the Indian political course is the so-called strategic autonomy. That is, India sees itself as a new great power, and is not going to join any camp. In Delhi, they understand that if they adapt to the Americans in matters of containing Russia or China, this will not bring them anything good. Based on this position, they maintain relations with us and maintain them.
Now that most contacts with Europe have been cut off, we will probably have a chance to strengthen our own industrial potential. And here India is very useful to us. The Indians have advanced electronics, powerful pharmaceuticals, information technology, and so on.
– Yes, and they buy our oil, taking advantage of the fact that Russian oil is now sold at a discount. They began to buy oil very actively, and we will develop this cooperation with them as much as possible.
– Pakistan, of course, is a less important partner for us, but nevertheless, in the new conditions, it also becomes more interesting for us. This country has its own industrial potential. Moreover, Pakistan itself has always shown interest in relations with Russia. So here, too, we, for sure, will look for some opportunities. Although, of course, as always, this will require a careful balance between these two powers of South Asia – India and Pakistan – so as not to offend the Indians too much.
– Traditionally, Russia's long-term goal in this region is to establish, first of all, trilateral cooperation Russia-India-China. We have long used a trilateral format, within the framework of which meetings of foreign ministers are held periodically. All this is moving forward, of course, with difficulty. Cooperation suffered after the bloody clashes at the border lines of India and China in 2020. Formally, these countries now reject the need for mediation. However, Russia still played a certain role in supporting their diplomatic contacts. She always tries to do what she can, because the most peaceful and constructive relations between China and India are beneficial for Russia.
– Such as you say, there is jealousy. Indeed, the Indians are closely watching our relations with China. Of course, they are well aware that a certain imbalance is associated primarily with objective geographical factors. We are neighbors with China. We are connected by an extensive infrastructure that makes it easy to export a wide variety of resources and goods from China, as well as to deliver to China.
With India, we are far apart. There are, of course, various projects for transport corridors, but in principle, our logistics are not the easiest. It has little effect on some “high-tech”, like weapons and nuclear equipment. But mass raw materials, such as oil, gas, metals, their supply is still associated with logistics problems.
However, there may be some activation here now. Simply because the European market is dying for us and, apparently, in a few years it may completely disappear if we find ourselves in a state of “iron curtain” with the West. Under these conditions, India becomes more promising for us. And for her, our cheaper offers on the energy market, apparently, will also be very advantageous. We will probably get a wider experience of interacting with each other, which will already support us in the future.
– The Chinese fleet is not yet stronger than the US fleet. But it is being built faster than the American one. In terms of numbers, it is already the largest in the world, but in terms of combat power, most likely, the second.
The peculiarity of Chinese military construction is that for the past two or three decades, Beijing has paid special attention to the development of naval forces, consistently reducing its ground forces. These troops now and earlier were the last in line for funding.
– Quite right. The Chinese do not see a serious threat from the Sino-Russian land border. They do not consider Russia a source of military threat, and therefore they are developing forces of expansion – the navy. This, I think, suits us completely, since our border with China is land.
The Chinese are probably already approaching the moment when they will be able to solve the Taiwan issue by force. But here we must bear in mind that this would be a risky and technically complex operation. No one has undertaken amphibious operations of this magnitude since the Second World War. No one really knows how all this can go. There is a very high level of uncertainty, even though the Chinese may have a huge force concentrated on such a task.
In any case, this is a very big risk. Theoretically, of course, it is possible that they will take this step. However, they can do this only when they decide that the political situation is absolutely hopeless and the separatists are finally winning.
– The problem is that Ukraine and Taiwan are incomparable values. Ukraine certainly plays a role in international supply chains. It partly affects the markets for agricultural products, some other types of industrial raw materials, but Taiwan is a completely different matter. It is a monopoly in the production of a range of electronic components. More than 90% of chips of certain technological standards used worldwide today are made in Taiwan. And any conflict over Taiwan would be a colossal shock to the global economy. The loss of Taiwan for the United States is practically a foreign policy disaster and the final loss of international prestige.
The Biden administration, after the outbreak of hostilities in Ukraine, stated that if something similar happened to Taiwan, the level of support that the United States would provide to it would be significantly different from the level of support provided to Ukraine. The United States has a law on relations with Taiwan, which, unlike the situation with Ukraine, implies military assistance to the island. It is very harsh about this possibility on the part of the United States.
To Ukraine, on the contrary, the Americans have always very clearly stated that they will not participate in the war with Russia for it. They just promised to protect Taiwan. So the situation here is much more dangerous. The chances of reaching the situation of the Caribbean crisis of 1962 are much higher than in the case of Ukraine, where everything can get out of control only in case of someone's mistake or accident. In the situation with Taiwan, this will happen for sure. The overall situation in the world may depend on the outcome of the struggle for Taiwan.
– I think it is possible if the Chinese come to the conclusion that their peaceful strategy of reuniting the island and the mainland does not work. While they focus on different political forces. Elections are underway in Taiwan. The next local events will take place at the end of 2022. Then there is the election year 2024. Apparently, according to the results of how everything goes there, they will draw conclusions.
– Most likely, yes. Although, of course, there may be some moments that we are not aware of. In China, for example, in 2005 a law was passed to combat separatism. It says that if all peaceful means of unification have been exhausted, then it is possible to use the non-peaceful way to reunite Taiwan with the motherland. Somehow, in this logic, they, apparently, will move.
– …Just huge contacts.
– Twenty years ago, Ukraine began very actively, and under different governments, to develop ties with China. It hoped to eventually become for China a kind of entry point to European markets.
China was interested in Ukraine as a supplier of agricultural raw materials, especially sunflower oil, and secondly, as a major source of military technology. Ukraine inherited a lot from the Soviet Union in terms of military technology.
This mutual interest was fueled under both Kuchma and Yushchenko. And even when Euromaidan happened in Kyiv, the new authorities also continued this course. Another thing is that a severe economic crisis immediately broke out there and the redistribution of property began. Part of Chinese investment in agriculture then disappeared, but in general the line chosen by China continued.
Over the years, representatives of the Chinese “defense industry” pulled everything out of the Ukrainian military-industrial complex, including many space and aviation developments. Even those that Ukraine itself did not.
For example, in Ukraine, from Soviet times, there was a plant with a permit for the overhaul of Su-27 and MiG-29 aircraft. The overhaul permit means that this plant has a complete set of documentation for these machines, which was of great interest to China, which is engaged in the creation of its own aircraft.
Or, for example, at the time of the collapse of the Soviet Union at the Ukrainian Black Sea Shipyard, there were huge deposits of ship weapons and documentation for it. Ukrainian firms had a collection of drawings and documentation for various types of Soviet warships, radar equipment, and air-to-air missiles. Everything was there. As a result of Ukrainian-Chinese cooperation, volumes of all this documentation migrated to China.
And in the end, already against the background of the rupture of Russian-Ukrainian ties, the Chinese tried to go for broke and made a deal to buy the Zaporozhye motor-building enterprise Motor Sich.
-…and under pressure from the United States, the Ukrainian authorities broke this deal, sanctions were imposed against the Chinese investor, and this, of course, was a strong blow to relations between China and Ukraine. The price of the issue is several billion Chinese investments.
– Yes, despite the fact that this deal was cut off for them, the Chinese still continued to cooperate with them in the field of defense. As of 2020, after the united European Union, Ukraine continued to be China's main trading partner and their first trading partner among individual countries.
– Indeed, despite all the difficulties, China as a whole turned out to be on our side, which, of course, is not conducive to China's relations with Ukraine. But the Ukrainian economy is now destroyed. As far as I understand, there is no clearing for close economic cooperation there.
Although by the beginning of our special operation, China and Ukraine had only one contract in the field of military-technical cooperation. This is a batch of 450 engines for the Chinese combat training aircraft L-15, created on the basis of our Yak-130 with AI-222-25 engines. Motor Sich made a version of engines with afterburner for the Chinese.
It is difficult to say what state this contract is in now. However, there were no reports about the bombing of the Zaporizhzhya Motor Sich enterprise.
Be that as it may, it is assumed that after the end of our military special operation, Ukrainian GDP will be halved. I think bilateral Ukrainian-Chinese cooperation is likely to gradually wither away and is unlikely to be revived in the foreseeable future.
– Yes. There is no doubt about this for sure.