Ukraine conflict + Yuan trade + Oil and gas

On Thursday morning, we woke up to disturbing television footage of Russia’s attack on Ukraine. Not much was clear in the morning; only over the day, it became clear that it was an all-out attack on the country from pretty much every direction. At China.Table, we quickly realized that we have to dedicate a special issue on this military conflict. After all, China is more than a mere bystander in this war.

Official Beijing performed a downright staggering balancing act on Thursday, as Michael Radunski analyzes. It meant sticking to the basic principle of Ukraine’s territorial inviolability while simultaneously sympathizing with Russia’s actions. China’s Foreign Ministry even managed to deny that the attack was an invasion. It sounded as if Beijing had alternative facts at hand. And concerns about an attack on Taiwan still linger.

It is a fact that China could assist Russia, should the West impose sweeping financial sanctions. As Finn Mayer-Kuckuk analyzes, the People’s Republic has already developed an alternative financial system for transactions with the Chinese yuan. China already settles about 17 percent of its trade with Russia in yuan. But there are questions here: Will Beijing undermine Western sanctions in this way? And would Putin actually want to trade in yuan?

Greater cooperation between the two superpowers is also on the horizon in the power sector, as Frank Sieren analyzes. The Power of Siberia 2 gas pipeline signed in Beijing in early February could pump gas to China from oil fields that have so far only fed Europe. Putin is thus creating an alternative for himself in case the EU stops importing gas. And the yuan could also function as a currency in this case.

Several Western politicians stressed that yesterday, Europe has entered a new reality. That nothing was the same anymore. Whether this also applies to China will be seen in the coming weeks.

Your
Christiane Kühl