Table.Briefing: China

Bypassing sanctions + War as a political tool

  • Iran as an example of bypassing sanctions
  • How does the West’s response to Russia affect China?
  • Concerns about lockdown in Shanghai
  • Chinese students criticize delayed evacuation
  • EV Sales triple
  • Tibetan singer Tsewang Norbu
  • Yale economist Stephen Roach: Only China can stop Russia
Dear reader,

China will not supply aircraft components to Russia for the time being. That was an important piece of the larger political puzzle on Thursday. While Beijing pays lip service to Russia’s support, there has been precious little tangible action so far. Yet anything that cushions Western sanctions would be extremely valuable to Russia. Using China’s trade with Iran as an example, Michael Radunski analyzes how a boycott can be undermined – and why China will not make use of these options to aid Russia. After all, the country does not want to be drawn into a sanctions spiral.

Since the Russian invasion of Ukraine, the likelihood that China will reach for Taiwan has been a major discussion topic. Couldn’t it be an example for China if Russia takes back its supposedly own territory? Are Western sanctions perhaps so half-hearted that Beijing feels vindicated in its invasion plans?

However, the Taiwan situation can hardly be compared with the Ukraine situation, argues Frank Sieren. The threshold for military action is much higher for China because it stands to lose much more than Russia. It is strongly internationally integrated and has achieved great things in the past decades during its technological and economic catch-up. China is far too smart to sacrifice all that – especially since the modern battlefield is the hunt for the most advanced technology, believes Sieren. That doesn’t mean China won’t keep trying to take over Taiwan without bloodshed.

Shanghai is facing a potential lockdown. Marcel Grzanna has gathered all the evidence that points to the city’s plans to nip an incipient Omicron outbreak in the bud. Many citizens are already preparing for extended isolation at home. Some companies, however, are doing the opposite: They want their employees to move nice and productive to the workplace for the lockdown and even spend their nights there. Work-life balance? Not in the pandemic.

Your
Finn Mayer-Kuckuk
Image of Finn  Mayer-Kuckuk

Feature

Example Iran: How China could help Russia

China's Foreign Minister Wang Yi and Iran's Foreign Minister Hossein Amir Abdollahian in China
They have never quite parted ways – China’s Foreign Minister Wang Yi and his Iranian counterpart Hossein Amir Abdollahian in Wuxi, China, in January 2022.

The West is showing rare unity in the Ukraine war. It wants to persuade Russia to give in by imposing tough sanctions. But the success of these punitive measures depends on China’s behavior. Will Beijing undermine the West’s sanctions to help its partner in Moscow? While Beijing performs a breathtaking balancing act politically, it supposedly sides firmly with Moscow on economic issues. “China and Russia will continue to conduct normal trade cooperation in the spirit of mutual respect, equality and mutual benefit,” a Chinese Foreign Ministry spokesman said.

But experts agree that China will not dare to violate Western sanctions openly. Instead, both countries could use less obvious channels to significantly weaken the impact of sanctions on Russia’s financial and real economy. A look at China’s attitude toward Iran shows exactly how this could unfold.

China’s greed for Iranian oil

Hardly any country in the world is subject to sanctions as severe as Iran. What is currently being called the “mother of all sanctions” on Russia has long since struck Iran. The Islamic republic was excluded from the Swift international payments system. Since then, transfers to or from the country are no longer possible. Yet, Iran is still unwilling to relent in the nuclear row. This has several reasons. One of them is China, or more precisely, China’s hunger for Iranian oil.

Officially, Beijing has almost completely stopped imports of Iranian oil since January 2021. Only a few weeks ago, the Chinese customs office recorded oil shipments from Iran again for the first time. Iran expert Ali Ahmadi sees it differently. “Of course, a lot of Iranian oil has been shipped to China all this time,” the scientist from the Brussels-based think tank Vocal Europe told China.Table.

However, Beijing apparently goes to great lengths to conceal the transport. According to Ahmadi, there are two frequently used methods for this.

Method 1: Ships don’t declare their cargo correctly or simply relabel their cargo. “Then Iranian oil quickly becomes oil from Malaysia or the United Arab Emirates,” Ahmadi explains. And indeed: China’s oil imports from these two countries have risen conspicuously.

Variant 2: The oil is simply transferred from an Iranian vessel to a tanker from a different country at sea. And so, despite sanctions, a lively trade has developed. According to surveys by data platform Vortexa Analytics, up to 660,000 barrels of Iranian oil were shipped to China – every day.

China’s hunger for energy is apparently too great to voluntarily surrender trade with one of the world’s largest oil suppliers. Especially since Iran has to sell its oil at particularly low prices due to Western sanctions. This is an offer that Beijing could not pass up. This could also apply to Russian crude materials. Trade of Russian oil and gas has not yet been sanctioned, which is partly because of Germany, which otherwise sees its energy security in jeopardy. But this may yet happen.

Payment without Swift – small banks and chips

The situation is different for Russia’s financing options, as some Russian banks have already been excluded from the Swift international payment system. So have Iran’s financial institutions, which prohibits the use of the US dollar. There have been multiple solutions to this in Sino-Iranian trade.

China transfers payments for its oil imports to Iranian accounts in China, Ahmadi explains. Technically, the money does not leave China. “Since repatriation of these funds is made difficult by the sanctions, Iran uses them to purchase directly in China, especially materials and supplies such as machinery for factories.” Following this example, Russian companies are currently attempting to open more bank accounts with Chinese financial institutions (China.Table reported).

In addition, China repeatedly utilized small, supposedly insignificant banks to undermine Western sanctions and finance trade with Iran. The Chinese payment system CIPS could therefore become interesting for Russian banks (China.Table reported). Similar to Swift, the Cross-Border Interbank Payment System offers its participants clearing and settlement services for cross-border RMB payments. However, Cips is limited to the Chinese national currency – and since the yuan is not freely exchangeable, Cips has not yet established itself internationally.

Crypto as a loophole?

In parallel, the Russian central bank has long since taken precautions: It is said to hold investments equivalent to between $77 billion and $90 billion in Chinese yuan with the Chinese central bank. In addition, an agreement on a bilateral swap line with an equivalent value of around $25 billion was reached back in 2014. It is a kind of loan that Chinese corporations can use to pay for Russian energy imports.

Sanctions expert Erika Trujillo cites yet another new payment method as a potential option for sanctions breakers: cryptocurrencies. “Basically, cryptos could provide more transparency and security if we were able to develop means to better monitor payments and apply compliance mechanisms.” Trujillo is a lawyer and co-founder of a firm that focuses on legal safeguards for businesses: SEIA Compliance Technologies. SEIA also helps companies manage risks such as sanctions. Trujillo explains that there has been a lack of transparency regulations and compliance mechanisms for cryptocurrencies. With cryptocurrencies carrying a reputation of illegality and politicians so far not daring to impose the necessary regulation, a potential loophole emerges. “Pretending it doesn’t exist or disparaging it as a payment method doesn’t make us safer,” Trujillo warns.

China and Russia work on de-dollarization

To many politicians, sanctions seem like a wonder weapon, the sanctions expert explains. But punitive measures often have unintended consequences. And in the case of Russia and China, these consequences could be far-reaching. “The more we sanction actors like China and Russia, the stronger their alternative financial systems become, and this, in turn, can threaten the supremacy of US institutions, which serves as the foundation for the scope of sanctions.”

To circumvent the sanctions imposed by the West, Russia and China will therefore try and conduct their business outside the US dollar. It is a fortunate coincidence that the leadership in Beijing is striving for the so-called de-dollarization of world trade anyway (China.Table reported). And since the list of sanctioned countries is currently growing, this project is now gaining unexpected momentum.

No aircraft components for Russia

But China’s de-dollarization project is still quickly reaching its limits: Beijing had to cut back imports of Russian coal, for example, because almost all contracts are denominated in dollars, a Chinese trader told Reuters. Negotiations are now underway with Russian exporters to settle future payments in yuan or gold.

And so it is to be expected that China – as it has with Iran – will find a number of ways to continue doing business with Russia. But they will weigh their options. Because Beijing will not be willing to give up its trade with the US and Europe, not even for Moscow. The news on Thursday that China will not supply aircraft components to Russia for the time being fits into this. This is of particular significance. The ban on exporting spare parts for aircraft was one of the first sanctions against Russia. Without a supply of parts, Aeroflot’s fleet will not remain airworthy for long. Quickly, there was talk about China’s circumvention of these sanctions. After all, China’s airlines not only have unlimited access to parts from Airbus and Boeing. Airbus even operates a plant in China.

The refusal to supply aircraft components is now a signal that, while China is paying lip service to Russia, it is not outright undermining all sanctions. The more united the West is, the more likely the People’s Republic will give in. Because at the end of the day, Beijing is primarily concerned with one thing: China’s interests.

  • Geopolitics
  • Iran
  • Russia
  • Russland
  • Trade
  • Ukraine

China stands more to lose than Russia

China’s position on the war is an important question in the current debate. Specifically, on the one hand, its position on the attack on Ukraine. And, in general, on war as a political tool. The most important aspect here is: What effect do the sanctions on Russia and the global wave of solidarity against Putin’s war have on potential plans to seize Taiwan?

There are currently two hypotheses: Does Beijing feel empowered by the events unfolding in Ukraine – or are the extensive sanctions having a deterring effect? Currently, the scales are tipped towards heightened caution. The upheavals triggered by the invasion show Beijing that it would not be in its own interest to also make itself an outsider in the global community.

First of all, Putin lashing out is a vindication of the approach of China and the United States to maintain the status quo and avoid a military conflict. Instead, the leading world power, the US, and a rising China are taking their national self-esteem from technological competition. The battle in the chip sector may be hard-fought, but it is a bloodless and ultimately even productive rivalry.

Even Beijing is irritated by Putin’s fanatical idea that an attack on Ukraine, which he instigated, would prolong the Cold War. A time when Russia was much more powerful because armies and natural resources were the most important factors in the global power play.

China wants to learn from America’s mistakes

Over the past 70 years, Washington learned the painful lesson that wars are not only inhumane, but also do not pay off economically or politically. US voters are therefore more unwilling than ever to fight for freedom far from home. And so, “I’m bringing our soldiers home,” became one of Donald Trump’s celebrated slogans. His successor, Joe Biden, even said bluntly, “We’ve got to learn from our mistakes. This decision about Afghanistan is not just about Afghanistan. It’s about ending an era of major military operations to remake other countries.” Moving away from this would make the US “stronger and more effective and safer at home.”

This explains why Washington, on the one hand, condemns Putin’s aggression, but at the same time does not want to be drawn into the Ukraine war. Beijing, for its part, has learned from the Americans that military invasions do not pay off. The mistakes of others act as a warning here.

To be sure, Beijing persistently repeats its position that Taiwan is a domestic issue. Factually, however, things are different. In addition, the US protects Taiwan militarily and a large part of the Taiwanese feel independent. Certainly, there are forces within the Chinese leadership that would prefer to take Taiwan by force as soon as possible. But the great solidarity against Putin, which extends far beyond the Western hemisphere, has now made Beijing more aware of the global price of a military invasion.

Extensive sanctions act as a deterrent

China simply stands much more to lose than Russia: The Asian single market, the new free trade zone RCEP, the largest in the world, would be at stake, as would the economic-political networks of the Belt and Road Initiative (BRI). So too would the prosperity that the Chinese have created for themselves as the global factory. For boycotts of Made in China would be a certainty. China and Russia are quite different in this respect:

First, Russia cannot compete in the new, global, technology-driven power struggle. What is particularly bitter: China has now far surpassed it.

Second, Russia is not as globally interconnected as China, the EU, or the US due to its technological underdevelopment and long-standing political clashes with the West.

Thirdly, Russia’s economy is relatively small, with a share of just over 3 percent of the global economy measured by purchasing power. China, on the other hand, accounts for almost 19 percent. The US is at almost 16 percent. The EU, just under 15 percent. Conversely, the interconnectedness and relative size also mean that the global economy has a greater significance for China.

The bottom line is that the price of an attack will now appear so high to Beijing that the new wave of solidarity has made war over Taiwan less likely – although it did not eliminate it entirely. Vladimir Putin, on the other hand, was able to calculate with much lower risks, since Russia was already very isolated. And even he thoroughly miscalculated the consequences of his actions.

Future battles will be fought over technology

What is also encouraging here is that the confrontation between China and the USA is shifting into areas other than military ones. There are trade wars, but at least they are not actual wars. Whoever controls supply chains also gains significant political power. More important are the power struggles over new technologies and to change global norms in one’s own favor. What is also encouraging here is that the confrontation between China and the USA is shifting into areas other than military ones. There are trade wars, but at least they are not real wars. Whoever controls the supply chains is also very powerful politically. Even more important are the power struggles over new technologies and the scope to change global norms in one’s own favor. Admittedly, new technologies also make war possible without humans, and thus more likely under certain conditions. But networking, controlling or even manipulating people with data and technology seems increasingly tempting. This also applies to courting Taiwan.

Beijing can also draw lessons from Putin’s war in this regard. As the temptation to measure military strength diminishes, Beijing will now strive to make itself technologically independent of the West even faster, to strengthen domestic consumption, and to diversify Asian trade flows. These are the central points of the Chinese government’s plan for 2022, which was presented to the National People’s Congress this week. The buzzword “decoupling” inadequately describes this process. Rather, diversification would be more fitting. After all, China’s international economic network and the opportunities for foreign companies are not decreasing overall. However, China’s rise is making international competition tougher and probably more confrontational.

The Europeans still have a hard time with the fact that technology has become a field of international power struggle. Unlike Putin, however, they have long since left the old times behind. But they haven’t quite arrived in the new ones yet. Yet their prime already ended 100 years ago. Back then, the Europeans had the strongest armies, and the British Empire still ruled a quarter of the world. But now their armies are weak. They only play a marginal role on the international military stage, or at best in alliance with the United States.

At the same time, Europe is not up to par technology-wise. The €100 billion that Berlin is now pouring into the German armed forces should be balanced out by at least €100 billion for education and innovation and should spark an EU-wide initiative. Only in this way can Europe adequately face the challenge posed by China and step out of the shadow of the United States.

  • EU
  • Geopolitics
  • Russia
  • Technology
  • Ukraine

News

Omicron: Shanghai companies demand spending lockdown at work

Concerns are rising in Shanghai about a wide-scale Covid lockdown. The most cosmopolitan metropolis in the People’s Republic of China recorded 76 new infections with the Omicron variant on Wednesday. The comparatively low but rising numbers of positive cases have recently led numerous companies and institutions to prepare their employees for several weeks of isolation.

For example, employees at a research institute in the city’s Pudong district were asked to prepare for a two-week stay in their offices. “We were told to bring blankets and personal necessities to the office so we could spend up to 14 days at a time there,” one British employee told China.Table. He said he felt a real competition had broken out across the city among managers and company bosses to see who could wage the “war on Covid” most consistently.

The background to this is the authorities’ rigorous contact tracing. Wherever a case is detected, apartment blocks, schools, or office buildings are immediately cordoned off and mass testing is carried out. This has already led to minor lockdowns across the city. “Information about infection cases and the corresponding measures is provided relatively transparently. However, due to the immediate contact tracing, you never know when you are affected by possible isolation yourself,” says Ioana Kraft, Managing Director of the EU Chamber of Commerce in Shanghai.

It is yet unclear how long China plans to continue its zero-covid strategy. Recently, the chief epidemiologist of China’s Center for Disease Control and Prevention, Zeng Guang, had publicly pondered that this strategy could not be maintained “forever”. Zeng also stated that the different strategies of the West and China would align permanently. grz

  • Coronavirus
  • Health

Evacuated students criticize Chinese embassy

According to a media report, Chinese students have criticized the delayed evacuation from Ukraine. A 22-year-old student named Yang told the British newspaper The Guardian that he had tried to reach the embassy of the People’s Republic after the Russian invasion began, but the line was busy. Yang reportedly studied classical music in Kyiv. “I don’t know why the embassy didn’t tell us the war was going to break out when other countries advised their citizens to leave days before,” Yang said. As a result, he had followed the university’s emergency protocol and gone to a bunker. After a few days, he found a way to escape the city.

Another student told the newspaper that he ultimately traveled to the Polish border on his own. The evacuation operation, which was delayed, continues to raise questions about the extent to which China was aware of Russia’s plans (China.Table reported). On Wednesday, Chinese state media broadcast videos of the arrival of 115 Chinese students in the western Ukrainian city of Lviv. They were welcomed there with banners reading “Kids, Motherland takes you home.” A total of 6,000 Chinese citizens had been evacuated from Ukraine to safe regions, making it one of the largest evacuation operations in the history of the People’s Republic. ari

  • Geopolitics
  • Society
  • Ukraine

EV sales nearly tripled

Sales of new energy vehicles (NEV) rose by 189 percent in February compared to last year. This was reported by the China Passenger Car Association (CPCA). According to the report, BYD continues to lead the electric drive market, both for hybrids and for pure-battery EVs. Saic, Tesla, Geely, GAC Aion and Great Wall follow closely. German manufacturers are not among the top 10. Since the pandemic could already be considered over in February 2021, this represents a genuine increase without many statistical effects. fin

  • Autoindustrie

Profile

Tsewang Norbu – his voice is forever silenced

Tsewang Norbu during an appearance on regional TV in his home province of Sichuan

Tsewang Norbu’s songs are not only popular in the Tibetan community. His music combines Chinese and Western influences, and the 25-year-old also has fans in other parts of the People’s Republic of China. His ethnic pop seemed to build a reconciliatory bridge between the Tibetan minority and the Han Chinese.

On February 22, Norbu released a song whose title translates to “if you regret something, don’t keep it to yourself.” In all likelihood, the song is his last artistic legacy. Norbu has reportedly passed away, according to information from Tibetan human rights organizations.

The International Campaign for Tibet (ICT) reports that on February 25, a young man set himself on fire in front of the Potala Palace in the capital city of Lhasa. The man seems to be Tsewang Norbu. It is currently unknown whether the severely injured man died or survived. Within a very short time, Chinese security forces extinguished the burning body and carried it away. It is not known where.

“Since 2009, 157 Tibetans have already set themselves on fire because they saw no other way to protest human rights abuses in Chinese regime-occupied Tibet,” says Executive Director Kai Mueller of ICT Germany. Norbu’s latest attempt is apparently another desperate reaction to the Chinese Communist Party’s oppressive policy of repression.

According to information from Tibetan exile groups, repression against Tibetans has recently intensified in Sog, Driru, and Dranggo counties in eastern Tibet. This is also where Norbu’s hometown of Nyagchu, which is part of Sichuan, is located. According to reports by the Tibetan exile government, not only Buddhist monks and nuns, but also ordinary religious citizens are being sent to re-education camps by the thousands. Human rights organizations report torture and murder.

A wave of self-immolations among Tibetans began in 2009 around the 50th anniversary of the Tibet Uprising on March 10, 1959. Since then, only sparse information has reached the outside world. Many Tibetans apparently saw self-immolations as the last chance to make a statement against Chinese occupation. After 2015, however, the number of self-immolations declined significantly.

According to Radio Free Asia, Norbu’s mother, Sonam Wangmo, is also a nationally known singer. His uncle, on the other hand, is in jail and is considered one of Tibet’s most famous political prisoners: Sogkhar Lodoe Gyatso was sentenced to 18 years in prison in 2018 after he single-handedly protested against the Chinese occupation in front of the Potala Palace.

His uncle, Lodoe Gyatso, had previously been imprisoned for 23 years after being convicted of manslaughter in the 1990s. His wife, Gakyi, received a two-year sentence for recording a video of her husband that she smuggled across the country’s borders to India. In it, Lodoe Gyatso announced his protest and his motives.

The case of Norbu brings the situation of Tibetans back into focus to some degree. ICT reports that his Weibo account was flooded with condolences after news of his alleged death, and was subsequently temporarily suspended. A few days ago, some 200 exiled Tibetans gathered in Dharamsala, India, for a vigil in memory of the artist. Marcel Grzanna

  • Human Rights
  • Tibet

Opinion

Only China can stop Russia

By Stephen Roach
Stephen S. Roach, US-amerikanischer Wirtschaftswissenschaftler und Senior Fellow am Jackson Institute for Global Affairs der Yale University sowie Dozent an der Yale School of Management
The well-known economist Stephen Roach (Yale University) was Chairman of Morgan Stanley Asia

With war raging in Ukraine, China’s annual “Two Sessions” convey an image of a country in denial. As the Communist Party and its advisory body gather in Beijing this month, there has been little or no mention of a seismic disruption in the world order – an omission that is all the more glaring in view of China’s deep-rooted sense of its unique place in history. With its unabashed great power aspirations, modern China may well be at a decisive juncture.

Two documents – the joint Sino-Russian cooperation agreement, signed on February 4 at the opening of the Beijing Winter Olympics, and the Work Report, delivered on March 5 by Chinese Premier Li Keqiang to the National People’s Congress – encapsulate China’s disconnect. The wide-ranging statement on Sino-Russian cooperation spoke of a “friendship between the two States [that] has no limits.” It featured an almost breathless accounting of common interests, as well as commitments to addressing climate change, global health, economic cooperation, trade policy, and regional and geostrategic ambitions. The West was put on notice that it faced a powerful combination as a new adversary in the East.

Li’s work report ignores global turmoil

Yet a mere 29 days later, it was largely business as usual for Li, who presented what is by now the annual Chinese boilerplate prescription for development and prosperity. A familiar list of reforms stressed China’s ongoing commitments to poverty reduction, job creation, digitization, environmental protection, meeting demographic challenges, disease prevention, and a wide range of economic and financial issues. Yes, there was a widely noted tweak to the economic forecast – with a 2022 growth target of “around 5.5%” that, while weak by Chinese standards, was actually slightly stronger than expected – and some hints of likely policy support from fiscal, monetary, and regulatory authorities. But this work report was notable in saying as little as possible about a world in turmoil.

Yet China can’t have it both ways. There is no way it can stay the course, as Li suggests, while adhering to the partnership agreement with Russia announced by Xi Jinping and Vladimir Putin. Many believed that Russia and China had come together in shaping a grand strategy for a new Cold War. I called it China’s triangulation gambit: joining with Russia to corner the United States, just as the Sino-American rapprochement 50 years ago successfully cornered the former Soviet Union. The US, the architect of that earlier triangulation, was now being triangulated.

Yet in the span of just one month, Putin’s horrific war against Ukraine has turned this concept on its head. If China remains committed to its new partnership with Russia, it faces guilt by association. Just as Russia has been isolated by draconian Western sanctions that could devastate its economy for decades, the same fate awaits China if it deepens its new partnership. This outcome, of course, is completely at odds with China’s development goals just enunciated by Li. But it is a very real risk if China maintains unlimited support for Russia, including tempering the impact of Western sanctions, as a literal reading of the February 4 agreement implies.

China cannot grow and stick to partnership with Putin

The Chinese leadership appears to sense this untenable dilemma. After Russia’s invasion of Ukraine was met by uncharacteristic silence from the Standing Committee of the Politburo, the top seven leaders of the Party, China has since underscored its time-honored fallback principle of respect for national sovereignty. At the Munich Security Conference last month, Foreign Minister Wang Yi stressed this point, along with China’s long-standing insistence on non-intervention in other states’ internal affairs – an argument that bears directly on Taiwan.

But, at the National People’s Congress on March 7, Wang dug in his heels, insisting that “China and Russia will … steadily advance our comprehensive strategic partnership.” It is as if Putin knew full well when he went to Beijing in early February that he was setting a trap for China.

Xi now faces a critical decision. He has the greatest leverage of any world leader to broker a peace deal between Russia and Ukraine. To do that, he needs to send a strong message to Putin that Russia’s brutal invasion crosses China’s own principled redline on territorial sovereignty. That means he will need to register a strong objection to Putin’s efforts to rewrite post-Cold War history and resurrect Imperial Russia. To negotiate an end to the devastating conflict that Putin unleashed, Xi will need to put his February 4 partnership commitment back on the table as a decisive bargaining chip. Russia’s prospects are bleak, at best; without China, it has none at all. China holds the trump card in the ultimate survival of Putin’s Russia.

Is Xi’s place in history at stake?

Xi’s own place in history may be on the line, too. Later this year, the 20th Party Congress will convene in Beijing. The major item on the agenda is hardly a secret: Xi’s appointment to an unprecedented third five-year term as the Party’s General Secretary. China watchers, including me, have long presumed that nothing would stand in the way of this well-telegraphed outcome. But history, and the current events that shape it, have an uncanny knack of shifting the leadership calculus in any country. That is true not only in democracies like the US but also in autocracies like Russia and China.

The choice for Xi is clear: He can stay the course set by his February 4 agreement with Russia, and be forever tainted with the sanctions, isolation, and excruciating economic and financial pressures that come with that stance. Or he can broker the peace that will save the world and cement China’s status as a great power led by a great statesman.

As the architect of the “Chinese dream” and what he believes is a great nation’s even greater rejuvenation, Xi has no choice. My bet is that Xi will do the unthinkable – defuse the Russia threat, before it is too late.

Stephen S. Roach, a faculty member at Yale University and former chairman of Morgan Stanley Asia, is the author of Unbalanced: The Codependency of America and China (Yale University Press, 2014) and the forthcoming Accidental Conflict.

Copyright: Project Syndicate, 2022.
www.project-syndicate.org

  • Geopolitics
  • Russia

Executive Moves

Christiane Fischer became the new Head of Supplier Management, Divisional Logistics Automotive Electronics at Bosch China in Suzhou, Jiangsu, at the beginning of the month. Fischer was previously Senior Logistics Manager at United Automotive Electronic Systems (UAES), the joint venture between Zhong-Lian Automotive Electronics and Bosch in Shanghai.

Hao Zhiping has been appointed the new President, Chief Executive Officer and Deputy Party Secretary of state-owned aerospace and defense conglomerate Aviation Industry Corporation of China (AVIC).

  • Bosch

Dessert

Selling directly from the field: A vendor advertises spring tea from a tea farm in Bashan village in eastern China’s Zhejiang province via online stream.

China.Table editorial office

CHINA.TABLE EDITORIAL OFFICE

Licenses:
    • Iran as an example of bypassing sanctions
    • How does the West’s response to Russia affect China?
    • Concerns about lockdown in Shanghai
    • Chinese students criticize delayed evacuation
    • EV Sales triple
    • Tibetan singer Tsewang Norbu
    • Yale economist Stephen Roach: Only China can stop Russia
    Dear reader,

    China will not supply aircraft components to Russia for the time being. That was an important piece of the larger political puzzle on Thursday. While Beijing pays lip service to Russia’s support, there has been precious little tangible action so far. Yet anything that cushions Western sanctions would be extremely valuable to Russia. Using China’s trade with Iran as an example, Michael Radunski analyzes how a boycott can be undermined – and why China will not make use of these options to aid Russia. After all, the country does not want to be drawn into a sanctions spiral.

    Since the Russian invasion of Ukraine, the likelihood that China will reach for Taiwan has been a major discussion topic. Couldn’t it be an example for China if Russia takes back its supposedly own territory? Are Western sanctions perhaps so half-hearted that Beijing feels vindicated in its invasion plans?

    However, the Taiwan situation can hardly be compared with the Ukraine situation, argues Frank Sieren. The threshold for military action is much higher for China because it stands to lose much more than Russia. It is strongly internationally integrated and has achieved great things in the past decades during its technological and economic catch-up. China is far too smart to sacrifice all that – especially since the modern battlefield is the hunt for the most advanced technology, believes Sieren. That doesn’t mean China won’t keep trying to take over Taiwan without bloodshed.

    Shanghai is facing a potential lockdown. Marcel Grzanna has gathered all the evidence that points to the city’s plans to nip an incipient Omicron outbreak in the bud. Many citizens are already preparing for extended isolation at home. Some companies, however, are doing the opposite: They want their employees to move nice and productive to the workplace for the lockdown and even spend their nights there. Work-life balance? Not in the pandemic.

    Your
    Finn Mayer-Kuckuk
    Image of Finn  Mayer-Kuckuk

    Feature

    Example Iran: How China could help Russia

    China's Foreign Minister Wang Yi and Iran's Foreign Minister Hossein Amir Abdollahian in China
    They have never quite parted ways – China’s Foreign Minister Wang Yi and his Iranian counterpart Hossein Amir Abdollahian in Wuxi, China, in January 2022.

    The West is showing rare unity in the Ukraine war. It wants to persuade Russia to give in by imposing tough sanctions. But the success of these punitive measures depends on China’s behavior. Will Beijing undermine the West’s sanctions to help its partner in Moscow? While Beijing performs a breathtaking balancing act politically, it supposedly sides firmly with Moscow on economic issues. “China and Russia will continue to conduct normal trade cooperation in the spirit of mutual respect, equality and mutual benefit,” a Chinese Foreign Ministry spokesman said.

    But experts agree that China will not dare to violate Western sanctions openly. Instead, both countries could use less obvious channels to significantly weaken the impact of sanctions on Russia’s financial and real economy. A look at China’s attitude toward Iran shows exactly how this could unfold.

    China’s greed for Iranian oil

    Hardly any country in the world is subject to sanctions as severe as Iran. What is currently being called the “mother of all sanctions” on Russia has long since struck Iran. The Islamic republic was excluded from the Swift international payments system. Since then, transfers to or from the country are no longer possible. Yet, Iran is still unwilling to relent in the nuclear row. This has several reasons. One of them is China, or more precisely, China’s hunger for Iranian oil.

    Officially, Beijing has almost completely stopped imports of Iranian oil since January 2021. Only a few weeks ago, the Chinese customs office recorded oil shipments from Iran again for the first time. Iran expert Ali Ahmadi sees it differently. “Of course, a lot of Iranian oil has been shipped to China all this time,” the scientist from the Brussels-based think tank Vocal Europe told China.Table.

    However, Beijing apparently goes to great lengths to conceal the transport. According to Ahmadi, there are two frequently used methods for this.

    Method 1: Ships don’t declare their cargo correctly or simply relabel their cargo. “Then Iranian oil quickly becomes oil from Malaysia or the United Arab Emirates,” Ahmadi explains. And indeed: China’s oil imports from these two countries have risen conspicuously.

    Variant 2: The oil is simply transferred from an Iranian vessel to a tanker from a different country at sea. And so, despite sanctions, a lively trade has developed. According to surveys by data platform Vortexa Analytics, up to 660,000 barrels of Iranian oil were shipped to China – every day.

    China’s hunger for energy is apparently too great to voluntarily surrender trade with one of the world’s largest oil suppliers. Especially since Iran has to sell its oil at particularly low prices due to Western sanctions. This is an offer that Beijing could not pass up. This could also apply to Russian crude materials. Trade of Russian oil and gas has not yet been sanctioned, which is partly because of Germany, which otherwise sees its energy security in jeopardy. But this may yet happen.

    Payment without Swift – small banks and chips

    The situation is different for Russia’s financing options, as some Russian banks have already been excluded from the Swift international payment system. So have Iran’s financial institutions, which prohibits the use of the US dollar. There have been multiple solutions to this in Sino-Iranian trade.

    China transfers payments for its oil imports to Iranian accounts in China, Ahmadi explains. Technically, the money does not leave China. “Since repatriation of these funds is made difficult by the sanctions, Iran uses them to purchase directly in China, especially materials and supplies such as machinery for factories.” Following this example, Russian companies are currently attempting to open more bank accounts with Chinese financial institutions (China.Table reported).

    In addition, China repeatedly utilized small, supposedly insignificant banks to undermine Western sanctions and finance trade with Iran. The Chinese payment system CIPS could therefore become interesting for Russian banks (China.Table reported). Similar to Swift, the Cross-Border Interbank Payment System offers its participants clearing and settlement services for cross-border RMB payments. However, Cips is limited to the Chinese national currency – and since the yuan is not freely exchangeable, Cips has not yet established itself internationally.

    Crypto as a loophole?

    In parallel, the Russian central bank has long since taken precautions: It is said to hold investments equivalent to between $77 billion and $90 billion in Chinese yuan with the Chinese central bank. In addition, an agreement on a bilateral swap line with an equivalent value of around $25 billion was reached back in 2014. It is a kind of loan that Chinese corporations can use to pay for Russian energy imports.

    Sanctions expert Erika Trujillo cites yet another new payment method as a potential option for sanctions breakers: cryptocurrencies. “Basically, cryptos could provide more transparency and security if we were able to develop means to better monitor payments and apply compliance mechanisms.” Trujillo is a lawyer and co-founder of a firm that focuses on legal safeguards for businesses: SEIA Compliance Technologies. SEIA also helps companies manage risks such as sanctions. Trujillo explains that there has been a lack of transparency regulations and compliance mechanisms for cryptocurrencies. With cryptocurrencies carrying a reputation of illegality and politicians so far not daring to impose the necessary regulation, a potential loophole emerges. “Pretending it doesn’t exist or disparaging it as a payment method doesn’t make us safer,” Trujillo warns.

    China and Russia work on de-dollarization

    To many politicians, sanctions seem like a wonder weapon, the sanctions expert explains. But punitive measures often have unintended consequences. And in the case of Russia and China, these consequences could be far-reaching. “The more we sanction actors like China and Russia, the stronger their alternative financial systems become, and this, in turn, can threaten the supremacy of US institutions, which serves as the foundation for the scope of sanctions.”

    To circumvent the sanctions imposed by the West, Russia and China will therefore try and conduct their business outside the US dollar. It is a fortunate coincidence that the leadership in Beijing is striving for the so-called de-dollarization of world trade anyway (China.Table reported). And since the list of sanctioned countries is currently growing, this project is now gaining unexpected momentum.

    No aircraft components for Russia

    But China’s de-dollarization project is still quickly reaching its limits: Beijing had to cut back imports of Russian coal, for example, because almost all contracts are denominated in dollars, a Chinese trader told Reuters. Negotiations are now underway with Russian exporters to settle future payments in yuan or gold.

    And so it is to be expected that China – as it has with Iran – will find a number of ways to continue doing business with Russia. But they will weigh their options. Because Beijing will not be willing to give up its trade with the US and Europe, not even for Moscow. The news on Thursday that China will not supply aircraft components to Russia for the time being fits into this. This is of particular significance. The ban on exporting spare parts for aircraft was one of the first sanctions against Russia. Without a supply of parts, Aeroflot’s fleet will not remain airworthy for long. Quickly, there was talk about China’s circumvention of these sanctions. After all, China’s airlines not only have unlimited access to parts from Airbus and Boeing. Airbus even operates a plant in China.

    The refusal to supply aircraft components is now a signal that, while China is paying lip service to Russia, it is not outright undermining all sanctions. The more united the West is, the more likely the People’s Republic will give in. Because at the end of the day, Beijing is primarily concerned with one thing: China’s interests.

    • Geopolitics
    • Iran
    • Russia
    • Russland
    • Trade
    • Ukraine

    China stands more to lose than Russia

    China’s position on the war is an important question in the current debate. Specifically, on the one hand, its position on the attack on Ukraine. And, in general, on war as a political tool. The most important aspect here is: What effect do the sanctions on Russia and the global wave of solidarity against Putin’s war have on potential plans to seize Taiwan?

    There are currently two hypotheses: Does Beijing feel empowered by the events unfolding in Ukraine – or are the extensive sanctions having a deterring effect? Currently, the scales are tipped towards heightened caution. The upheavals triggered by the invasion show Beijing that it would not be in its own interest to also make itself an outsider in the global community.

    First of all, Putin lashing out is a vindication of the approach of China and the United States to maintain the status quo and avoid a military conflict. Instead, the leading world power, the US, and a rising China are taking their national self-esteem from technological competition. The battle in the chip sector may be hard-fought, but it is a bloodless and ultimately even productive rivalry.

    Even Beijing is irritated by Putin’s fanatical idea that an attack on Ukraine, which he instigated, would prolong the Cold War. A time when Russia was much more powerful because armies and natural resources were the most important factors in the global power play.

    China wants to learn from America’s mistakes

    Over the past 70 years, Washington learned the painful lesson that wars are not only inhumane, but also do not pay off economically or politically. US voters are therefore more unwilling than ever to fight for freedom far from home. And so, “I’m bringing our soldiers home,” became one of Donald Trump’s celebrated slogans. His successor, Joe Biden, even said bluntly, “We’ve got to learn from our mistakes. This decision about Afghanistan is not just about Afghanistan. It’s about ending an era of major military operations to remake other countries.” Moving away from this would make the US “stronger and more effective and safer at home.”

    This explains why Washington, on the one hand, condemns Putin’s aggression, but at the same time does not want to be drawn into the Ukraine war. Beijing, for its part, has learned from the Americans that military invasions do not pay off. The mistakes of others act as a warning here.

    To be sure, Beijing persistently repeats its position that Taiwan is a domestic issue. Factually, however, things are different. In addition, the US protects Taiwan militarily and a large part of the Taiwanese feel independent. Certainly, there are forces within the Chinese leadership that would prefer to take Taiwan by force as soon as possible. But the great solidarity against Putin, which extends far beyond the Western hemisphere, has now made Beijing more aware of the global price of a military invasion.

    Extensive sanctions act as a deterrent

    China simply stands much more to lose than Russia: The Asian single market, the new free trade zone RCEP, the largest in the world, would be at stake, as would the economic-political networks of the Belt and Road Initiative (BRI). So too would the prosperity that the Chinese have created for themselves as the global factory. For boycotts of Made in China would be a certainty. China and Russia are quite different in this respect:

    First, Russia cannot compete in the new, global, technology-driven power struggle. What is particularly bitter: China has now far surpassed it.

    Second, Russia is not as globally interconnected as China, the EU, or the US due to its technological underdevelopment and long-standing political clashes with the West.

    Thirdly, Russia’s economy is relatively small, with a share of just over 3 percent of the global economy measured by purchasing power. China, on the other hand, accounts for almost 19 percent. The US is at almost 16 percent. The EU, just under 15 percent. Conversely, the interconnectedness and relative size also mean that the global economy has a greater significance for China.

    The bottom line is that the price of an attack will now appear so high to Beijing that the new wave of solidarity has made war over Taiwan less likely – although it did not eliminate it entirely. Vladimir Putin, on the other hand, was able to calculate with much lower risks, since Russia was already very isolated. And even he thoroughly miscalculated the consequences of his actions.

    Future battles will be fought over technology

    What is also encouraging here is that the confrontation between China and the USA is shifting into areas other than military ones. There are trade wars, but at least they are not actual wars. Whoever controls supply chains also gains significant political power. More important are the power struggles over new technologies and to change global norms in one’s own favor. What is also encouraging here is that the confrontation between China and the USA is shifting into areas other than military ones. There are trade wars, but at least they are not real wars. Whoever controls the supply chains is also very powerful politically. Even more important are the power struggles over new technologies and the scope to change global norms in one’s own favor. Admittedly, new technologies also make war possible without humans, and thus more likely under certain conditions. But networking, controlling or even manipulating people with data and technology seems increasingly tempting. This also applies to courting Taiwan.

    Beijing can also draw lessons from Putin’s war in this regard. As the temptation to measure military strength diminishes, Beijing will now strive to make itself technologically independent of the West even faster, to strengthen domestic consumption, and to diversify Asian trade flows. These are the central points of the Chinese government’s plan for 2022, which was presented to the National People’s Congress this week. The buzzword “decoupling” inadequately describes this process. Rather, diversification would be more fitting. After all, China’s international economic network and the opportunities for foreign companies are not decreasing overall. However, China’s rise is making international competition tougher and probably more confrontational.

    The Europeans still have a hard time with the fact that technology has become a field of international power struggle. Unlike Putin, however, they have long since left the old times behind. But they haven’t quite arrived in the new ones yet. Yet their prime already ended 100 years ago. Back then, the Europeans had the strongest armies, and the British Empire still ruled a quarter of the world. But now their armies are weak. They only play a marginal role on the international military stage, or at best in alliance with the United States.

    At the same time, Europe is not up to par technology-wise. The €100 billion that Berlin is now pouring into the German armed forces should be balanced out by at least €100 billion for education and innovation and should spark an EU-wide initiative. Only in this way can Europe adequately face the challenge posed by China and step out of the shadow of the United States.

    • EU
    • Geopolitics
    • Russia
    • Technology
    • Ukraine

    News

    Omicron: Shanghai companies demand spending lockdown at work

    Concerns are rising in Shanghai about a wide-scale Covid lockdown. The most cosmopolitan metropolis in the People’s Republic of China recorded 76 new infections with the Omicron variant on Wednesday. The comparatively low but rising numbers of positive cases have recently led numerous companies and institutions to prepare their employees for several weeks of isolation.

    For example, employees at a research institute in the city’s Pudong district were asked to prepare for a two-week stay in their offices. “We were told to bring blankets and personal necessities to the office so we could spend up to 14 days at a time there,” one British employee told China.Table. He said he felt a real competition had broken out across the city among managers and company bosses to see who could wage the “war on Covid” most consistently.

    The background to this is the authorities’ rigorous contact tracing. Wherever a case is detected, apartment blocks, schools, or office buildings are immediately cordoned off and mass testing is carried out. This has already led to minor lockdowns across the city. “Information about infection cases and the corresponding measures is provided relatively transparently. However, due to the immediate contact tracing, you never know when you are affected by possible isolation yourself,” says Ioana Kraft, Managing Director of the EU Chamber of Commerce in Shanghai.

    It is yet unclear how long China plans to continue its zero-covid strategy. Recently, the chief epidemiologist of China’s Center for Disease Control and Prevention, Zeng Guang, had publicly pondered that this strategy could not be maintained “forever”. Zeng also stated that the different strategies of the West and China would align permanently. grz

    • Coronavirus
    • Health

    Evacuated students criticize Chinese embassy

    According to a media report, Chinese students have criticized the delayed evacuation from Ukraine. A 22-year-old student named Yang told the British newspaper The Guardian that he had tried to reach the embassy of the People’s Republic after the Russian invasion began, but the line was busy. Yang reportedly studied classical music in Kyiv. “I don’t know why the embassy didn’t tell us the war was going to break out when other countries advised their citizens to leave days before,” Yang said. As a result, he had followed the university’s emergency protocol and gone to a bunker. After a few days, he found a way to escape the city.

    Another student told the newspaper that he ultimately traveled to the Polish border on his own. The evacuation operation, which was delayed, continues to raise questions about the extent to which China was aware of Russia’s plans (China.Table reported). On Wednesday, Chinese state media broadcast videos of the arrival of 115 Chinese students in the western Ukrainian city of Lviv. They were welcomed there with banners reading “Kids, Motherland takes you home.” A total of 6,000 Chinese citizens had been evacuated from Ukraine to safe regions, making it one of the largest evacuation operations in the history of the People’s Republic. ari

    • Geopolitics
    • Society
    • Ukraine

    EV sales nearly tripled

    Sales of new energy vehicles (NEV) rose by 189 percent in February compared to last year. This was reported by the China Passenger Car Association (CPCA). According to the report, BYD continues to lead the electric drive market, both for hybrids and for pure-battery EVs. Saic, Tesla, Geely, GAC Aion and Great Wall follow closely. German manufacturers are not among the top 10. Since the pandemic could already be considered over in February 2021, this represents a genuine increase without many statistical effects. fin

    • Autoindustrie

    Profile

    Tsewang Norbu – his voice is forever silenced

    Tsewang Norbu during an appearance on regional TV in his home province of Sichuan

    Tsewang Norbu’s songs are not only popular in the Tibetan community. His music combines Chinese and Western influences, and the 25-year-old also has fans in other parts of the People’s Republic of China. His ethnic pop seemed to build a reconciliatory bridge between the Tibetan minority and the Han Chinese.

    On February 22, Norbu released a song whose title translates to “if you regret something, don’t keep it to yourself.” In all likelihood, the song is his last artistic legacy. Norbu has reportedly passed away, according to information from Tibetan human rights organizations.

    The International Campaign for Tibet (ICT) reports that on February 25, a young man set himself on fire in front of the Potala Palace in the capital city of Lhasa. The man seems to be Tsewang Norbu. It is currently unknown whether the severely injured man died or survived. Within a very short time, Chinese security forces extinguished the burning body and carried it away. It is not known where.

    “Since 2009, 157 Tibetans have already set themselves on fire because they saw no other way to protest human rights abuses in Chinese regime-occupied Tibet,” says Executive Director Kai Mueller of ICT Germany. Norbu’s latest attempt is apparently another desperate reaction to the Chinese Communist Party’s oppressive policy of repression.

    According to information from Tibetan exile groups, repression against Tibetans has recently intensified in Sog, Driru, and Dranggo counties in eastern Tibet. This is also where Norbu’s hometown of Nyagchu, which is part of Sichuan, is located. According to reports by the Tibetan exile government, not only Buddhist monks and nuns, but also ordinary religious citizens are being sent to re-education camps by the thousands. Human rights organizations report torture and murder.

    A wave of self-immolations among Tibetans began in 2009 around the 50th anniversary of the Tibet Uprising on March 10, 1959. Since then, only sparse information has reached the outside world. Many Tibetans apparently saw self-immolations as the last chance to make a statement against Chinese occupation. After 2015, however, the number of self-immolations declined significantly.

    According to Radio Free Asia, Norbu’s mother, Sonam Wangmo, is also a nationally known singer. His uncle, on the other hand, is in jail and is considered one of Tibet’s most famous political prisoners: Sogkhar Lodoe Gyatso was sentenced to 18 years in prison in 2018 after he single-handedly protested against the Chinese occupation in front of the Potala Palace.

    His uncle, Lodoe Gyatso, had previously been imprisoned for 23 years after being convicted of manslaughter in the 1990s. His wife, Gakyi, received a two-year sentence for recording a video of her husband that she smuggled across the country’s borders to India. In it, Lodoe Gyatso announced his protest and his motives.

    The case of Norbu brings the situation of Tibetans back into focus to some degree. ICT reports that his Weibo account was flooded with condolences after news of his alleged death, and was subsequently temporarily suspended. A few days ago, some 200 exiled Tibetans gathered in Dharamsala, India, for a vigil in memory of the artist. Marcel Grzanna

    • Human Rights
    • Tibet

    Opinion

    Only China can stop Russia

    By Stephen Roach
    Stephen S. Roach, US-amerikanischer Wirtschaftswissenschaftler und Senior Fellow am Jackson Institute for Global Affairs der Yale University sowie Dozent an der Yale School of Management
    The well-known economist Stephen Roach (Yale University) was Chairman of Morgan Stanley Asia

    With war raging in Ukraine, China’s annual “Two Sessions” convey an image of a country in denial. As the Communist Party and its advisory body gather in Beijing this month, there has been little or no mention of a seismic disruption in the world order – an omission that is all the more glaring in view of China’s deep-rooted sense of its unique place in history. With its unabashed great power aspirations, modern China may well be at a decisive juncture.

    Two documents – the joint Sino-Russian cooperation agreement, signed on February 4 at the opening of the Beijing Winter Olympics, and the Work Report, delivered on March 5 by Chinese Premier Li Keqiang to the National People’s Congress – encapsulate China’s disconnect. The wide-ranging statement on Sino-Russian cooperation spoke of a “friendship between the two States [that] has no limits.” It featured an almost breathless accounting of common interests, as well as commitments to addressing climate change, global health, economic cooperation, trade policy, and regional and geostrategic ambitions. The West was put on notice that it faced a powerful combination as a new adversary in the East.

    Li’s work report ignores global turmoil

    Yet a mere 29 days later, it was largely business as usual for Li, who presented what is by now the annual Chinese boilerplate prescription for development and prosperity. A familiar list of reforms stressed China’s ongoing commitments to poverty reduction, job creation, digitization, environmental protection, meeting demographic challenges, disease prevention, and a wide range of economic and financial issues. Yes, there was a widely noted tweak to the economic forecast – with a 2022 growth target of “around 5.5%” that, while weak by Chinese standards, was actually slightly stronger than expected – and some hints of likely policy support from fiscal, monetary, and regulatory authorities. But this work report was notable in saying as little as possible about a world in turmoil.

    Yet China can’t have it both ways. There is no way it can stay the course, as Li suggests, while adhering to the partnership agreement with Russia announced by Xi Jinping and Vladimir Putin. Many believed that Russia and China had come together in shaping a grand strategy for a new Cold War. I called it China’s triangulation gambit: joining with Russia to corner the United States, just as the Sino-American rapprochement 50 years ago successfully cornered the former Soviet Union. The US, the architect of that earlier triangulation, was now being triangulated.

    Yet in the span of just one month, Putin’s horrific war against Ukraine has turned this concept on its head. If China remains committed to its new partnership with Russia, it faces guilt by association. Just as Russia has been isolated by draconian Western sanctions that could devastate its economy for decades, the same fate awaits China if it deepens its new partnership. This outcome, of course, is completely at odds with China’s development goals just enunciated by Li. But it is a very real risk if China maintains unlimited support for Russia, including tempering the impact of Western sanctions, as a literal reading of the February 4 agreement implies.

    China cannot grow and stick to partnership with Putin

    The Chinese leadership appears to sense this untenable dilemma. After Russia’s invasion of Ukraine was met by uncharacteristic silence from the Standing Committee of the Politburo, the top seven leaders of the Party, China has since underscored its time-honored fallback principle of respect for national sovereignty. At the Munich Security Conference last month, Foreign Minister Wang Yi stressed this point, along with China’s long-standing insistence on non-intervention in other states’ internal affairs – an argument that bears directly on Taiwan.

    But, at the National People’s Congress on March 7, Wang dug in his heels, insisting that “China and Russia will … steadily advance our comprehensive strategic partnership.” It is as if Putin knew full well when he went to Beijing in early February that he was setting a trap for China.

    Xi now faces a critical decision. He has the greatest leverage of any world leader to broker a peace deal between Russia and Ukraine. To do that, he needs to send a strong message to Putin that Russia’s brutal invasion crosses China’s own principled redline on territorial sovereignty. That means he will need to register a strong objection to Putin’s efforts to rewrite post-Cold War history and resurrect Imperial Russia. To negotiate an end to the devastating conflict that Putin unleashed, Xi will need to put his February 4 partnership commitment back on the table as a decisive bargaining chip. Russia’s prospects are bleak, at best; without China, it has none at all. China holds the trump card in the ultimate survival of Putin’s Russia.

    Is Xi’s place in history at stake?

    Xi’s own place in history may be on the line, too. Later this year, the 20th Party Congress will convene in Beijing. The major item on the agenda is hardly a secret: Xi’s appointment to an unprecedented third five-year term as the Party’s General Secretary. China watchers, including me, have long presumed that nothing would stand in the way of this well-telegraphed outcome. But history, and the current events that shape it, have an uncanny knack of shifting the leadership calculus in any country. That is true not only in democracies like the US but also in autocracies like Russia and China.

    The choice for Xi is clear: He can stay the course set by his February 4 agreement with Russia, and be forever tainted with the sanctions, isolation, and excruciating economic and financial pressures that come with that stance. Or he can broker the peace that will save the world and cement China’s status as a great power led by a great statesman.

    As the architect of the “Chinese dream” and what he believes is a great nation’s even greater rejuvenation, Xi has no choice. My bet is that Xi will do the unthinkable – defuse the Russia threat, before it is too late.

    Stephen S. Roach, a faculty member at Yale University and former chairman of Morgan Stanley Asia, is the author of Unbalanced: The Codependency of America and China (Yale University Press, 2014) and the forthcoming Accidental Conflict.

    Copyright: Project Syndicate, 2022.
    www.project-syndicate.org

    • Geopolitics
    • Russia

    Executive Moves

    Christiane Fischer became the new Head of Supplier Management, Divisional Logistics Automotive Electronics at Bosch China in Suzhou, Jiangsu, at the beginning of the month. Fischer was previously Senior Logistics Manager at United Automotive Electronic Systems (UAES), the joint venture between Zhong-Lian Automotive Electronics and Bosch in Shanghai.

    Hao Zhiping has been appointed the new President, Chief Executive Officer and Deputy Party Secretary of state-owned aerospace and defense conglomerate Aviation Industry Corporation of China (AVIC).

    • Bosch

    Dessert

    Selling directly from the field: A vendor advertises spring tea from a tea farm in Bashan village in eastern China’s Zhejiang province via online stream.

    China.Table editorial office

    CHINA.TABLE EDITORIAL OFFICE

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