Propitious Balance

7 june 2014

China’s Position on the Ukrainian Crisis

Vassily B. Kashin, Ph.D. in Political Science, is a senior research fellow at the Center for Comprehensive European and International Studies at the National Research University–Higher School of Economics. He is also a leading research fellow at the Institute of the Russian Far East.

SPIN РИНЦ: 3480-3664

ORCID: 0000-0001-9283-4528

Researcher ID: A-9102-2017

vkashin@hse.ru

Resume: The Ukrainian crisis has demonstrated once again that the global Chinese business empire is growing much faster than Beijing’s military-political capabilities. There has again emerged a need for a more active Chinese policy to protect national interests.

The Ukrainian crisis of late 2013-early 2014 brought China into the center of world politics without any effort on the part of Beijing. In the past decade, China became a pole of the world economy, alternative to the West. Now, holding a low-profile and detached position, China, simply by the very fact of its existence, has had a decisive influence on the development of the crisis. The Chinese authorities preferred to avoid expounding their views, but even the smallest nuances of the intonation of Chinese diplomats’ statements were scrutinized both in the West and Russia.

Beijing’s restrained political support for the Russian position and disapproval of sanctions against Russia added to Moscow’s confidence. “If one economic partner in one part of the world imposes sanctions, we turn our attention to other partners in other parts of the world,” the spokesman for Russian President Vladimir Putin, Dmitry Peskov, said in an interview with the British television channel BBC on March 19. “The world is not unipolar, so we will shift our attention to other economic partners.”

In his speech on the occasion of admission of Sevastopol and Crimea into Russia, Putin said: “We are grateful to the people of China, whose leaders have always considered the situation in Ukraine and Crimea taking into account the full historical and political context, and greatly appreciate India’s reserve and objectivity.” The fast economic growth of China and, to a lesser extent, other BRICS countries means that no country can now be sent into isolation or put under strong economic pressure without their participation. This factor has dramatically increased capabilities of large resource-based economies, including Russia, in countering Western policies.

Numerous statements by U.S. President Barack Obama about Russia’s “deepening isolation” and its “opposition to the international community” show that the U.S. is not yet fully aware of the new reality which predetermined the course of the Ukrainian crisis. At the same time, fear of a strong Sino-Russian alliance was probably among factors that caused the West to restrain its pressure on Russia. The United States’ Pacific allies, above all Japan, confined themselves only to token sanctions. Contacts with Japanese colleagues show that interest in the development of ties with Russia is still strong, while the prospect of a too rapid rapprochement between Moscow and Beijing is a source of concerns.

CHINA’S EQUILIBRISTICS

  • China’s policy towards the Ukrainian crisis was influenced by several conflicting factors. Among them:
  • possible negative impact of the Crimean precedent on the settlement of the Taiwan issue;
  • China’s negative attitude to U.S.-backed “color revolutions” and the need to counter Western influence;
  • impact of the crisis on Russia’s foreign policy and international position, and its implications for China;
  • China’s interests in Ukraine.

Let us look in more detail at point number one. A referendum on self-determination for a long time was an important item in the program of the separatist Democratic Progressive Party of Taiwan. Beijing reacted harshly to Taiwanese President Chen Shui-bian’s attempt in the first half of the 2000s to form a legal basis for such a referendum. The very discussion of a referendum bill in the Legislative Yuan (parliament) in 2003 triggered a series of harsh statements from Chinese leaders who accused Taipei of “provocations.” Chinese politicians have repeatedly said that a referendum on the island’s status may serve as a ground for reunifying Taiwan and mainland China militarily. China’s Anti-Secession law, adopted in 2005, allows the Chinese leadership to conduct a military operation if Taiwan takes steps to change its status towards a formal declaration of independence.

Thus, China’s stance on the Taiwan issue, which is center stage in China’s foreign policy, completely rules out a possibility of formal approval by Beijing of the Crimean referendum’s outcome. Such a move would create a very undesirable precedent and would deprive China of legal arguments against holding a similar referendum in Taiwan. Regardless of the content of the Ukrainian crisis and the nature of its relationships with participants in it, Beijing had to express its formal support for the sovereignty and territorial integrity of Ukraine (the Chinese Foreign Ministry’s statement of February 28) and ignore the outcome of the Crimean referendum. Any other move would have been suicidal for China.

But as China could not afford to recognize the legitimacy of the separatist referendum in Crimea, so it did not want to give even the smallest reasons for a deterioration of its relations with Moscow. China’s Foreign Ministry Spokesperson Hong Lei, commenting on the Crimean referendum on March 17, said that “China advocates honesty and objectivity in the Ukrainian issue.” He expressed hope that “all parties will exercise restraint and will find a political solution through dialogue” and that they “will settle the Crimean issue on the basis of respect for well-grounded concerns and legitimate rights and interests of all parties.”

China has repeatedly opposed sanctions against Russia and abstained in the UN Security Council voting on a U.S.-proposed resolution on Crimea. In early March, at the height of the Crimean crisis, Chinese Foreign Minister Wang Yi told the National People’s Congress that Russian-Chinese relations were going through “their best period” and that China would continue to make efforts to develop the strategic partnership between the two countries.

Similar factors were behind China’s approach to the status of Abkhazia and South Ossetia after the 2008 Russian-Georgian conflict. At that time, China also had to act under tight constraints due to the unresolved Taiwan issue. Both then and now, many Western observers indulged in wishful thinking and spoke about alleged differences between Moscow and Beijing over Russia’s expansionist actions.

In reality, however, the conflict with Georgia did not mar Russian-Chinese relations; their partnership soon became even closer. As regards China’s attitude towards the unrecognized territories, the Republic of Abkhazia has long sent an Honorary Consul to Beijing, who helps Chinese businessmen with paperwork and visits to his republic. From the point of view of Chinese law, this man is a private actor, but Beijing makes no effort to stop his work, despite protests from the Georgian embassy. Chinese business delegations regularly and openly visit Abkhazia. The Chinese are interested in it with a view to organizing joint ventures because of a special trade regime between Abkhazia and Russia. Members of Chinese NGOs also acted as observers at the Crimean referendum. Obviously, the peninsula will not be neglected by the Chinese business community.

China officially denounces Western-inspired “color revolutions,” especially as it itself may become a victim of a similar outbreak of instability. Addressing a UN Security Council meeting on March 4 which discussed a resolution on Crimea, Chinese Ambassador Liu Jieyi reaffirmed his country’s support for the territorial integrity of Ukraine and emphasized that the conflict had been caused by “outside interference,” something that is always denounced by China’s official rhetoric.

At the same time, Beijing put forward an initiative of its own to resolve the Ukrainian crisis. On March 15, Liu proposed a three-point plan at the UN Security Council: establishing an international coordinating mechanism to explore means to a political settlement of the Ukrainian crisis; refraining by all parties from taking any action that may further escalate the situation; and providing urgent aid to Ukraine by international financial institutions. This plan allowed China to demonstrate its active and responsible approach to the Ukrainian situation without taking sides. By its content, the Chinese plan rather met Russia’s interests as it made the introduction of sanctions against it redundant.

Official top-rank media outlets, such as the People’s Daily newspaper and the Xinhua News Agency, clearly manifested their rejection of yet another “color revolution” and admiration of Russia which harshly responded to it, and gloated over the West’s impotence. Editorials in the People’s Daily and Xinhua commentaries are recognized exponents of the Chinese Communist Party’s official policy.

Whereas the first materials in the Chinese press expressing approval of Moscow’s policy could be interpreted as a point of view of some “conservative” and “anti-Western” forces, a series of similar statements in various top-rank official sources leaves no room for such an interpretation. For example, Xinhua in a March 7 commentary emphasized that Ukraine was “torn apart because of a clumsy and selfish West” and that Russian leaders proved their credibility and shrewdness in protecting Russia’s “legitimate interests,” which led to the West’s “fiasco” in Ukraine.

A commentary published in the Beijing-based Global Times the day before said that Putin had taught a lesson to “color revolutions,” that his struggle was important to China and that cooperation with Russia was essential for China’s peaceful development. Whereas major official media outlets consider the Ukraine issue in terms of grand strategy, smaller publications discuss practical benefits for China from Russia’s turning to the East under the pressure of Western sanctions. For example, they wrote that in the new circumstances Beijing would obtain more favorable terms for contracts to buy Russian gas and military technologies. In addition, financial sanctions by the United States pave the ground for extending the presence of China’s UnionPay bank card payment network in Russia.

Statements by Chinese leaders and commentaries in the leading media outlets suggest the conclusion that Beijing intends to use the crisis to strengthen its strategic partnership with Russia on more favorable terms. In the new situation when Moscow has demonstrated its strength and ability to resist “color revolutions,” Russia’s importance for China is only growing. And conversely, a fall of the current Russian regime under Western pressure would be regarded as a highly undesirable situation, which may result in a strategic encirclement of China. China abides by this approach to Russia even despite strong diplomatic pressure from the West, as follows from published data on the dynamics of telephone conversations between Chinese leaders and their U.S. and European counterparts in the midst of crisis.

BREADBASKET AND FOUNDRY?

The issue of China’s interests in Ukraine deserves special discussion. Ukraine held a special place in Chinese policies in Eastern Europe. During Victor Yanukovych’s visit to Beijing in 2010, the two countries agreed to raise the status of their bilateral relations to strategic partnership. Since the early post-Soviet period, Ukraine had been a major and second largest supplier of military and dual-purpose technologies to China after Russia. Kiev’s role in the modernization of the Chinese defense industry has been recognized by Chinese experts. As the Ukrainian industrial potential declined and as China developed its own industry, the role of Sino-Ukrainian military-technical cooperation decreased. Nevertheless, in some areas (aircraft and ship engines, engine-transmission compartments for battle tanks, military electronics, guided munitions, etc.) this cooperation continued.

Apart from the traditional military-technical cooperation, on whose reinvigoration the Yanukovych government pinned certain hopes (his visit to China in December 2013, already after the current crisis began, ended with signing a long-term plan for this cooperation), the two countries developed interaction in agriculture. In 2013, China was the second largest trading partner of Ukraine, after Russia, their trade exceeding U.S. $10 billion and leaving Germany behind. Ukrainian leaders had serious plans to turn their country into a bridgehead for advancing Chinese manufacturers into European (if Ukraine signed an EU Association agreement) or Russian markets.

China’s economic interests in Ukraine were obviously great. Ding Yuanhung, a renowned Chinese international affairs expert and former ambassador to the UN, in his commentary on the Huangqiu Wan website wrote that China’s losses in Ukraine exceeded U.S. $10 billion. This figure apparently includes unfulfilled grain supplies from Ukraine, which gave rise to Chinese statements about plans to sue Ukraine for U.S. $3 billion. In terms of damage from revolutions, Ukraine ranks second for Chinese investors after Libya where construction companies alone lost U.S. $16.6 billion, according to China’s Ministry of Commerce.

* * *

The Ukrainian crisis has demonstrated once again that the global Chinese business empire is growing much faster than Beijing’s military-political capabilities. There has again emerged a need for a new, more active Chinese policy to protect national interests, and this is already noticeable, at least at the level of expert commentaries. As regards China’s approach to the new authorities in Ukraine, Beijing has not changed its usual practice of relations with post-revolutionary countries. Already back on February 25, shortly after Yanukovych fled to Russia, the Chinese Foreign Ministry announced its readiness to further develop “strategic partnership (with Ukraine) based on equality and mutual benefit.”

Most likely, after the May presidential elections and the stabilization of the Ukrainian government, political contacts between the two countries will be fully restored. However, the general deterioration of the investment climate, coupled with the exit of many Ukrainian politicians and businessmen who had been Chinese partners in such sensitive areas as real estate and construction, suggests that the importance of Ukraine for the Chinese foreign-economic strategy will markedly decrease.

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