Xi has Putin exactly where he wants him ...in China’s pocket
I CAN imagine that Vladimir Putin will be delighted to hear Russia described as having formed an “axis of evil” with Xi Jinping’s China. It implies that this week’s summit between the two leaders was somehow a meeting of equals.
The reality is very different. Russia and China may both be brutal dictatorships well versed in the art of suppressing their own people, but there the likeness ends. However much we might deplore China’s lack of freedom, there is no denying its huge economic success over the past generation. It’s grown from being a third world country to an economic superpower, on whose industrial might much of the world now depends.
Russia, meanwhile, has thrown away a great opportunity to join the Western club of wealthy, successful and free nations. Its vast population and natural resources should make it the second-richest nation on Earth. But it doesn’t even make it into the 10 largest economies, according to International Monetary Fund figures. That is unlikely to change in Russia’s favour any time soon.
The Ukraine war has emaciated Russia’s economy further. When war broke out two years ago, many – possibly including Putin himself – predicted that it would all be over in 72 hours. But attrition on the Russian economy, through the war effort and Western sanctions, has been considerable. In the first months of fighting alone, it shrank by 4.5 per cent.
SINCE then, Russia has unexpectedly clawed back a lot of lost ground – but mainly thanks to China. When the West imposed sanctions on Russia in 2022 and stopped buying its gas and oil, Xi Jinping had very different ideas. He saw an opportunity to source cheap oil and gas from Russia for his own energy-hungry economy. With Western nations no longer buying them, Russian fossil fuels became relatively cheap. At the same time, China supplied Russia with the vehicles and other machinery which it was no longer able to source from the West.
There is, then, a growing symbiosis between Russia and China, if a lopsided one. While Russia has become pathetically dependent on China, Xi Jinping’s vision is one of global economic dominance, involving China getting its hooks into Western markets.
But it’s not always succeeding. The West has finally woken up to the dangers of using Chinese-made technology in its broadband networks.
Biden, like Trump before him, is waging a trade war. Just this week, the US announced tariffs of 100 per cent on imports of Chinese cars to the US – four times the current level.
Yet China continues to gradually overhaul European manufacturers, especially regarding electric cars, solar panels and wind turbines. European net zero targets have also presented China with a huge opportunity.
Remember all those “green jobs” our leaders promised would follow carbon pledges? They are being created alright… but in China. According to the International Renewable Energy Agency, China had 5.5 million jobs in the renewables sector in 2023 – three times as many as in Europe, despite its countries’ green aspirations.
Chinese dominance is only going to become greater. While the West has been busy setting itself net zero targets, China has hurriedly cornered the market in the metals required for making batteries, solar panels and other goods. Now Europe’s battery industry, on which politicians have pinned so much hope, looks doomed.
It has suited Xi to entertain Putin this week. From the Chinese point of view, which is so very different from the European and North American perspective, it is all part of Xi playing global statesman. It is a thank you, too, for the cut-price oil and gas.
BUT Putin should beware. Xi isn’t going to want to threaten his relationship with the West by being seen to get too close to Russia. The last thing he will want is to stir Western governments into treating China as a player in the Ukraine war and placing secondary sanctions on the country.
Western dependence on cheap Chinese imports would make it difficult for Europe and America to boycott China in the same way as it has Russia – that would send inflation flying.
But all the same, what is there for Xi in stirring the West too much? He now holds the ace card and knows full well that Putin needs him far more than the other way around. If he decides the Ukraine war has gone too far, he can likely force Putin into a settlement. The Russian dictator might have thought he was walking on Xi’s red carpet, but he has really jumped straight into his pocket.
‘Xi won’t want to threaten his relationship with the West’