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China is the Sole Winner of the Ukraine War

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Sarah Neumann

In the midst of the conflict over redefining the world order among the great powers, intensified by the Ukraine war, China’s changing role remains obscure in the dust of the war. Although no end to the bloody war in Ukraine is on the horizon, the idea is growing that neither the West nor Russia, but only one country, will emerge successful and proud out of this chaos and that is the People’s Republic of China.

China, after an initial ambiguity towards the Russian invasion, has devised a strategy that not only prepares it for the worst political-economic fallout of this crisis but also enables it to exploit the opportunities arising from the transformations and geopolitical shifts that have ensued. The core of this strategy is the notion that China should leverage the struggle between two declining and exhausted powers to enhance its global position and influence and become a source of stability in today’s increasingly chaotic world. China now perceives more capacity and willingness to play a more significant role in shaping a new international order than before.

From Beijing’s perspective, the United States has been severely weakened by its endless wars and ambitious foreign interventions, including provoking Putin into the conflict in Ukraine. Russia’s aggression has diverted America’s power and attention to Europe, and this will hinder US President Biden, like his predecessors, from concentrating more on the Indo-Pacific region and restraining China. Moreover, Russia, isolated from the international community and weakened, will have no alternative but China in the long term, and thus, it will deepen its ties with Beijing even further. A relationship that has most of the features of a one-sided and coerced relationship, and creates the necessary conditions for Moscow’s growing dependence on Beijing.

Beijing’s leaders are well aware that this process is not risk-free. Russia’s excessive closeness to China risks intensifying hostilities with Beijing in Europe and elsewhere, and if Germany, France, and other European countries fulfill their pledges to upgrade their military capabilities, the United States can allocate its liberated military resources to confronting China. Essentially, the inclination of Europe towards the United States will push China into a deeper strategic dilemma. It will prompt America’s key allies in the Pacific, such as Japan and Australia, to adopt a more rigid military-security approach towards China. All these consequences can be very alarming for Chinese leaders.

In spite of all these considerations, and irrespective of the future outcome of the war in Ukraine; Beijing views the strengthening of its relations with Moscow as a way to create a balance of power against the United States in an era of increasing conflict between the great powers to reshape the new international order. This approach has been manifested in the intensification of the economic relations between these two countries in the aftermath of the war in Ukraine.

On the economic front, China has exploited the strategic opportunities of the war in Ukraine. In the first four months of 2022, trade between Russia and China increased by 25.9%. Russian exports to China reached 30.85 billion dollars with a growth of 37.8%. The physical volume of natural gas exports has also witnessed a surge of nearly 15%. China is on the verge of replacing the European Union as Russia’s main economic partner before the Ukraine crisis. Government officials in Beijing repeatedly urge Chinese businessmen to fill the gap caused by the withdrawal of Western businesses from the Russian market.

By 2023, most or all bilateral trade between the two countries is anticipated to be done in yuan. Chinese companies and brands are likely to dominate large segments of the Russian consumer market, becoming key industrial and technological partners of Russia. Apparently, a significant portion of Russia’s trade with third countries is also going to be conducted in yuan.

With the persistence of the Ukraine crisis, China has increasingly gained access to huge sources of strategic goods, including cheap Russian oil and gas. Russia’s Isolation from financial and global markets has put China in a position to procure these goods with considerable discounts using its own national currency. This situation significantly reduces the West’s ability to exert economic pressure and use energy weapons against China. Also, these profound internal changes in Russia’s political economy have made Moscow largely immune to the economic consequences of Western sanctions. Now, the United States and NATO have virtually no other means against Russia in Europe except costly military options, a situation whose continuation is a great strategic opportunity for China in the Pacific.

The Ukraine war has deeply impacted China’s foreign policy, particularly in the Indo-Pacific region. This war has strengthened the political-economic ties between China and Russia, enabling them to resist the political-economic pressure exerted by the West. Moreover, the likelihood of prolonged instability in Europe has complicated the United States’ presence in the Pacific Ocean, as it has already invested substantial financial and military resources to support Ukraine.

The war in Ukraine has also offered valuable and direct insights to China’s leaders on how the West might react militarily, economically, and politically in case they decide to attack Taiwan. Beijing’s officials have learned that these reactions encompass various measures, such as attempts to isolate from the international system, imposing extensive sanctions, freezing financial and key assets, denying access to international financial systems, conducting cyber operations against infrastructures, initiating media and information wars, and employing proxies if feasible. A prudent assessment of the implications of such actions will surely assist China in devising a measured strategy against the West and the United States regarding the Taiwan issue.

The Ukraine war offers two valuable insights for China’s policymakers, despite the limitations of the available data and the haste of the current assessments. Firstly, the US and its NATO allies are reluctant to engage in a direct military confrontation with a major nuclear power, even when it is waging a large-scale war near their borders. Secondly, the economic war with Russia has inflicted significant costs on Western economies, such as higher inflation and lower growth rates. Hence, a similar action against China, whose economy is ten times bigger, seems highly improbable. This conflict revealed that the West cannot impose sanctions on a large economy without jeopardizing its own stability. It also showed the effectiveness of Russia’s nuclear deterrent and the inability of the West to intervene even at a minimal level.

The Ukraine crisis has benefited China the most. However, this is not evident in Beijing’s cautious political rhetoric, as it seeks to balance its relations with the European Union and its cooperation with Russia. The crisis in Ukraine has weakened Russia and increased its reliance on China, it has imposed heavy security, political, economic, and social burdens on the European Union and has diverted the financial and military resources of the United States to the Ukraine crisis.

The winner of the Ukraine war is not the Russians, even if they manage to raise their flag in Luhansk and Donetsk. Neither are the United States and the West, even if they succeed in curbing the expansionist tendencies of the Russians. The real winner will be China, which is sitting on the sidelines and watching its rivals spend their considerable economic and military assets in a bloody, long, and fruitless war.