How does China navigate the complexities of its own interests while managing its alliance obligations? With the war in Ukraine, tensions with the US, support for Russia, and escalating trade wars, Beijing faces a delicate balancing act.
An analysis by the “Russia 2030 Futures Enhanced” laboratory, part of the Ideas for Russia Labs initiative launched by the Boris Nemtsov Foundation, reveals that economic pragmatism remains the driving force behind China’s decision-making, overshadowing any global ambitions.
The article “China’s Choice: Balancing Economic Priorities and Geopolitical Manoeuvres in a Sino-Russian Alliance” by Marta Shumanov, an economist and research intern at Ideas for Russia Labs, supervised by Pavel Havlicek (AMO), explores these themes. Published in New Eastern Europe, the full article can be found via the link.
Economic Pragmatism Drives Beijing’s Choices
China’s support for Russia plays a significant role in shaping the dynamics of the war in Ukraine. However, despite Beijing’s growing reputation as a global superpower, its economy remains heavily reliant on trade with countries that firmly support Ukraine. China is unwilling to jeopardize its economic stability to serve Russia’s interests. Pragmatism, not global ambitions, guides its decisions.
Vulnerability to Sanctions
Trade wars with the US and EU pose significant risks to China’s economy. Tariffs could reduce Chinese exports to the US by up to 85%, while the EU has already increased tariffs on Chinese electric vehicles.
Challenges of Shifting to Alternative Markets
China is working to strengthen ties with Belt and Road Initiative (BRI) countries and BRICS nations. However, these economies often lack the trade potential to compensate for losses from reduced economic relations with the US and EU.
Domestic demand is also insufficient to fill this gap.
The Belt and Road Initiative is a global infrastructure strategy aimed at fostering trade routes and economic connections with developing countries across Europe, Asia, Africa, and Latin America.
Cautious Support for Russia
China is treading carefully, avoiding direct confrontation with the West. However, it continues to support Russia in specific areas, such as the production of drones.
No Appetite for a Taiwan Conflict
A full-scale conflict over Taiwan, particularly one involving the US, would be economically disastrous for China. Aware of the risks, Beijing prioritizes economic considerations over political ones.