'If Russia is destroyed, we will be next': China aiding Russia with economic support

Economics
Vladimir putin in saint petersburg 50
Russian President Vladimir Putin | Presidential Press and Information Office/Wikimedia Commons

Ukrainians woke up to rumbles and explosions as Russia began blowing through its communities, leaving hundreds displaced and seeking sanctuary — Russian President Vladimir Putin said China is joining Russia’s side.

The war has garnered support on both sides. On social media, comments show people giving Ukraine their thoughts, and some say Russia isn’t doing anything wrong.

“If Russia is destroyed, we will be next. This is for sure,” Wang Yongchun, a retiree in Beijing, said to the Associated Press. “The United States wants to dominate the world.”

U.S. President Joe Biden has called the conflict a “pariah on the international stage.”

“With the West and many allies and partners around the globe united in sanctioning Russia, the country’s economy is bound to take a severe hit, and only a few countries will be willing and able to help Russia mitigate this,” Helena Legarda, a lead analyst at the Berlin-based Mercator Institute for China Studies, said to The Globe and Mail. “China’s economic support will be key.”

The Globe and Mail reported China helped Russia by providing technology and guidance for internet censorship and surveillance.

“While China will continue its economic engagement with Russia, I think China doesn’t want to be perceived by the international community as helping Russia to evade sanctions,” Tommy Wu, Hong Kong-based lead economist with Oxford Economics, said to The Globe and Mail. “I think China’s major commercial banks will scale back their financial transactions with Russia given their exposure to the U.S. dollar system. But it is less clear what China’s policy banks will do, given their exposure to infrastructure and energy projects in Russia.”

According to The Globe and Mail, while the European Union remains Russia's largest trading partner, China has become Russia's largest individual trading partner, surpassing Germany, the Netherlands and Italy.

According to International Monetary Fund data, Russian exports to China totaled $50 billion in 2020. In 2020, Russia imported Chinese goods amounting to $55 billion, while its imports from the European Union totaled $62 billion.

The economic sanctions placed on Russia by the west will likely accelerate Russia's greater dependence on China for trade. Only 1% of China's global trade activity is with Russia. However, 15% of Russia's activity is with China.

Victor Shih, a China expert at the University of California-San Diego, wrote in a piece for the Wire China that the result of Russia's invasion of Ukraine was a “weighty satellite state … almost completely dependent on Chinese finance and technologies.”

In a Wall Street Journal article, merely hours after Russia invaded Ukraine, China revealed that it has come to terms to import Russian wheat, which would only account for 1% of its international wheat imports. In February, Presidents Putin and Xi Jinping announced a deal where China will purchase oil and gas from Russia worth over $117 billion.

Alexander Gabuev, chairman of Russia in the Asia-Pacific Program at the Carnegie Moscow Center, stated that with limited options, China now has more leverage over Russia.

China may aid Russia by providing an alternative to the Swift payment system and even Chinese-made technology, further increasing Russia's dependence on China.