The calm before the counteroffensive
The calm before the counteroffensive
China hosts Central Asian leaders, talks up cooperation on water issues
Apologies for the long gap in newsletters. Ahead of Ukraine’s counteroffensive, I’m reading RUSI’s latest analysis on the Russian military’s evolving tactics. Another Russian military disaster shouldn’t be ruled out, although limited (and costly) Ukrainian territorial gains appear more likely. Russian forces suffer from low morale and poor training but are learning from experience and have entrenched their positions.
I don’t have much to add up top, although I wrote last week for The Diplomat on Beijing’s perception of diplomatic opportunities in Europe, uncertainty in Belarus amid Lukashenko’s health problems, and the counteroffensive. Sergei Kuznetsov wrote a more recent piece on Lukashenko’s health and potential succession in Belarus.
Over the next month, I’ll publish pieces on Taiwan’s energy security, Mongolia’s role in Sino-Russian relations, Beijing’s post-Feb 2022 economic ties with Moscow, and potential Western cooperation with China on limiting methane emissions in Central Asia. Please get in touch if you’d like to chat virtually or meet in DC. Thanks for reading. - Joe
Table of contents:
Sino-Russian diplomacy and peace talks
Central Asia
Sino-Russian political ties
Sino-Russian economic cooperation
PRC and Taiwanese energy
Taiwan security issues
Notable
Midjourney prompt: A dying river in a Central Asian landscape
1) Sino-Russian diplomacy and peace talks
China’s special envoy Li Hui expected in Moscow next week — source – TASS
Li Hui, China’s special envoy for Eurasian affairs, may visit Moscow next week, a source with knowledge of the matter told TASS on Saturday.
"Li Hui’s visit to Moscow is expected next week," he said.
Earlier, Chinese Foreign Ministry Spokesperson Wang Wenbin announced that the Chinese special envoy would visit Russia, Germany, Poland, Ukraine and France to take part in the talks seeking to resolve the Ukraine crisis.
Decisions of G7 Hiroshima summit aimed at containing both Russia and China — Lavrov – TASS
The decisions adopted at the G7 summit in Hiroshima pursue the goal of dual containment of Russia and China, Russian Foreign Minister Sergey Lavrov said at the 31st Assembly of the Council for Foreign and Defense Policy on Saturday.
"Could you take a look at those decisions which are being debated and adopted at the G7 summit in Hiroshima and which are aimed at dual containment of Russia and the People’s Republic of China?" he said.
Lavrov pointed out that the Western track has "completely outlived itself" in the form it had been developing in the Russian foreign policy until recently, as Russia embarked on the path "of most dramatic confrontation with the aggressive bloc comprising the Unites States, the European Union and the North Atlantic Alliance."
Comment: It’s been a while since I’ve seen Russian or Chinese complaints about “Anglo-Saxons.”
2) Central Asia
Xi charts course for China-Central Asia cooperation – People’s Daily [English-language]
As to enhancing connectivity, China will boost cross-border freight volume, support the construction of a cross-Caspian Sea international transport corridor, accelerate the upgrade of ports, develop China-Europe freight train hubs, and encourage businesses to build overseas warehouses in Central Asian countries, Xi said.
In terms of energy cooperation, China proposes to build a China-Central Asia energy development partnership, accelerate the construction of Line D of the China-Central Asia natural gas pipeline, increase oil and gas trade, develop energy cooperation across the industrial chain, and boost cooperation in new energy and the peaceful use of nuclear energy.
China is ready to promote green innovation cooperation with Central Asian countries, Xi said, citing soil treatment, water-efficient irrigation, and the establishment of high-tech businesses and information technology parks in Central Asia.
Comment: Water issues are increasingly important in Central Asia, as the Taliban is building a canal that would divert water from Uzbekistan and Turkmenistan. The PRC’s overwhelming preference is to resolve Central Asia’s water issues with diplomacy and carrots. Still, I wouldn’t be shocked if Beijing eventually uses hard power, or the threat of hard power, to achieve its regional ambitions vis-à-vis the Taliban, especially if the damage to Sino-Pakistan relations can be mitigated. Separately, Gabe Collins and Gopal Reddy’s piece on Chinese water issues was one of the most important articles I’ve read in the past five years. Water constraints are becoming more and more important globally but also in the context of Sino-Russian relations and China studies.
The China-Kyrgyzstan-Uzbekistan highway that runs across the Tianshan Mountain, the China-Tajikistan expressway that defies the Pamir Plateau, and the China-Kazakhstan crude oil pipeline and the China-Central Asia Gas Pipeline that traverse the vast desert -- they are the present-day Silk Road. The China-Europe Railway Express operating around the clock, the endless streams of freight trucks, and crisscrossing flights -- they are the present-day camel caravans. Entrepreneurs seeking business opportunities, health workers fighting the COVID-19, cultural workers delivering message of friendship, and international students pursuing further education -- they are the present-day goodwill ambassadors.
…
The world needs a stable Central Asia. The sovereignty, security, independence and territorial integrity of Central Asian countries must be upheld; their people's choice of development paths must be respected; and their efforts for peace, harmony and tranquility must be supported.
The world needs a prosperous Central Asia. A dynamic and prospering Central Asia will help people in the region achieve their aspiration for a better life. It will also lend strong impetus to global economic recovery.
The world needs a harmonious Central Asia. As a Central Asian saying goes, "Brotherhood is more precious than any treasure." Ethnic conflicts, religious strife, and cultural estrangement are not the defining feature of the region. Instead, solidarity, inclusiveness, and harmony are the pursuits of the Central Asian people. No one has the right to sow discord or stoke confrontation in the region, let alone seek selfish political interests.
[Comment: Many analysts say this paragraph is an implicit criticism of the United States/the West – and it is – but Beijing seems to be leaving itself room to criticize the actions of other countries or even domestic movements within Central Asia.]
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First, mutual assistance. It is important that we deepen strategic mutual trust, and always give each other unequivocal and strong support on issues concerning our core interests such as sovereignty, independence, national dignity, and long-term development. We should work together to ensure that our community features mutual assistance, solidarity, and mutual trust.
[Comment: This is a reference to Taiwan. President Tokayev went on CCTV to explain Astana’s position on Taiwan – in English. More below.]
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Third, universal security. It is important that we act on the Global Security Initiative, and stand firm against external attempts to interfere in domestic affairs of regional countries or instigate color revolutions. We should remain zero-tolerant to the three forces of terrorism, separatism and extremism, and strive to resolve security conundrums in the region. We should work together to ensure that our community features no-conflict and enduring peace.
…
Colleagues,
Our Summit has created a new platform and opened up new prospects for China-Central Asia cooperation. China will take this as an opportunity to step up coordination with all parties for good planning, development and progress of China-Central Asia cooperation.
First, we need to strengthen institutional building. We have set up meeting mechanisms on foreign affairs, economy, trade and customs, as well as a business council. China has also proposed establishment of meeting and dialogue mechanisms on industry and investment, agriculture, transportation, emergency response, education, and political parties, which will be platforms for all-round mutually beneficial cooperation between our countries.
Second, we need to expand economic and trade ties. ….
Third, we need to deepen connectivity. ….
Fourth, we need to expand energy cooperation. China would like to propose that we establish a China-Central Asia energy development partnership. We should expedite the construction of Line D of the China-Central Asia Gas Pipeline, expand trade in oil and gas, pursue cooperation throughout the energy industrial chains, and strengthen cooperation on new energy and peaceful use of nuclear energy.
Fifth, we need to promote green innovation. China will work with Central Asian countries to conduct cooperation in such areas as improvement and utilization of saline-alkali land and water-saving irrigation, build together a joint laboratory on agriculture in arid lands, and tackle the ecological crisis of the Aral Sea. China supports establishing high-tech firms and IT industrial parks in Central Asia. China also welcomes Central Asian countries to participate in special cooperation programs under the Belt and Road Initiative, including programs on sustainable development technologies, innovation and start-up, and spatial information science and technology.
Sixth, we need to enhance capabilities for development. …
Seventh, we need to strengthen dialogue between civilizations. …
Eighth, we need to safeguard peace in the region. China is ready to help Central Asian countries strengthen capacity building on law enforcement, security and defense, support their independent efforts to safeguard regional security and fight terrorism, and work with them to promote cyber-security. We will continue to leverage the role of the coordination mechanism among Afghanistan's neighbors, and jointly promote peace and reconstruction in Afghanistan.
Comment: The fourth, fifth, and eighth cooperation items seem to be the most important elements, in that order. I suspect that Beijing buried the energy cooperation item in order to avoid offending Moscow, which is still trying to ink its proposed Power of Siberia-2 natural gas pipeline with China.
Comment: It’s worth noting that President Tokayev, a former diplomat, is a fluent Mandarin speaker, so Beijing’s intended audience is external.
Press review: G7 seeks more curbs on Russia, China and Beijing buoys Central Asia security – TASS
[Quotes an article from Nezavisimaya Gazeta]: China becomes second guarantor of security for Central Asia [bolded by The Report]
Chinese President Xi Jinping, following meetings in the central Chinese city of Xian with the leaders of all five former Soviet republics in Central Asia, stressed the strength of ties between China and the region. A plenary session will be held on Friday, at which a key document will be approved. According to experts, the final statement or agreement hammered out in Xian will cover the bolstering of economic cooperation and emphasize the need to take a resolute stand against religious extremism and attempts by outside powers to impose their will on the young Central Asian countries.
China-Central Asia summit: lots of rhetoric, little substance – Eurasianet
One of the few other solid takeaways was a decision to turn the China-Central Asia summit into a biennial event. Kazakhstan was tapped to host the next meeting in 2025.
3) Sino-Russian political ties
Can China Thread the Needle on Ukraine? – Bonnie Lin of CSIS for Foreign Affairs
One month into the war, a group of top Chinese strategists from different academic disciplines, including the authors of Unrestricted Warfare, an influential 1999 book on new non-military and non-lethal methods of warfare, gathered informally in Beijing to analyze the impact of the Ukraine conflict on the global order. They assessed that the conflict was unlikely to end soon and that China could benefit from a prolonged fight. China should maintain its neutrality, they argued, in order to turn the crisis into an opportunity to recast its relationships with Russia, the United States, and Europe, all of which would suffer mounting costs as the war dragged on.
The Chinese strategists advocated for providing secret assistance to Russia to ensure that it could sustain the fight and would not collapse. However, they counseled against drifting entirely into Moscow’s camp.
The war in Ukraine is entering an uncertain but consequential phase. Ukrainian forces are preparing to mount a long-awaited counteroffensive that could see significant Russian military defeats, a costly setback to Ukraine, or a modified version of the status quo. Beijing is grappling with this uncertainty by expanding its diplomatic involvement and positioning itself to stanch a Russian military defeat or, perhaps more likely, opportunistically seize on Western political trends to drive wedges between the transatlantic alliance.
Ukraine war shows need for defense pact with US: PNG – Taipei Times [May 22nd]
Papua New Guinea (PNG) said it would sign a defense agreement with the US, ahead of a deal with Australia and despite opposition party concerns that it could upset China, because the Ukraine conflict shows the need for military capability.
Xinhua News Agency, Beijing, May 21. On May 18, President Xi Jinping sent a telegram to Wesley Simina to congratulate him on his inauguration as President of the Federated States of Micronesia.
Xi Jinping pointed out that since the establishment of diplomatic relations between China and Micronesia 34 years ago, the relations between the two countries have achieved considerable development on the basis of mutual respect and equal treatment, bringing tangible benefits to the two peoples. I deeply appreciate President Simina's long-term commitment to promoting China-FSM friendship. I attach great importance to the development of China-FSM relations, and I am willing to work together with President Simina to support each other on issues concerning each other's core interests, deepen exchanges and cooperation in various fields, and promote the continuous development of China-FSM comprehensive strategic partnership to better benefit the two peoples.
Federated States of Micronesia Reaffirm Diplomatic Ties to China – VOA [April 7th]
The Micronesian Congress has reaffirmed the Federated States of Micronesia’s diplomatic ties with China after outgoing President David Panuelo had urged a switch to Taiwan.
4) Sino-Russian economic cooperation
These data do not capture smuggling and may be incomplete, but they are reliable enough to provide the big picture: China appears to be wary of increasing trade with Russia. And contrary to conventional wisdom, Moscow does not have much to offer Beijing. China does not buy Russian oil and gas at a large discount, and it wants a diverse array of energy providers. Russia’s much-vaunted pivot toward China, in other words, is probably not as successful as Putin and Xi claim.
…
On paper, the Chinese-Russian trade relationship appears to be gaining steam. The U.S. dollar value of China’s exports to Russia rose by a solid 12.8 percent in 2022, boosted in part by exchange rate movements: last year, the yuan depreciated against both the dollar and the ruble, increasing the competitiveness of Chinese exports to Russia. But this seemingly robust growth in Chinese shipments across the Amur was not exceptional. Most of China’s top 20 trading partners recorded growth of ten percent or more in their imports from China last year. The value of Chinese exports to Australia and India—hardly Chinese allies—jumped by around 20 percent in 2022, for example.
Beijing’s direct provision of equipment and materials critical for military uses, such as transport vehicles and semiconductors, enables Russian military forces to sustain their offensive. The evidence shows that the PRC is already providing critical support for Moscow’s war aims by counterbalancing US and NATO support to Ukraine.
Comment: This was a somewhat controversial piece (and contrasts with what Demarais and many other analysts are saying). I largely agree with Demarais’ article: all public evidence indicates that Beijing is indeed complying with the letter of the law when it comes to sanctions and has refrained, so far, from making key investments or agreeing to new major infrastructure projects with Russia.
On the other hand, Chinese exports to third countries are not the appropriate baseline when evaluating the significance of Sino-Russian bilateral trade post-Feb 2022. Instead, analysis should examine Russian imports.
Russian imports from nearly every country fell sharply in 2022, as best can be determined by official data. The only exceptions to this dynamic appear to include the PRC, Turkey, Belarus and a few other countries, largely in Central Asia and the Middle East. Moreover, Chinese exports to Belarus and other countries are likely, in many cases, simply re-exported to Russia.
Chinese exports to Russia are exceptional and uniquely beneficial for the Kremlin, as these products are alleviating shortages, restraining inflation, and, in some instances, enabling the war effort.
I’ll have a more formal response soon.
5) PRC and Taiwanese energy
For that, we need to reinforce the institutions and systems in which countries can compete and cooperate and from which they benefit. This is why it is vitally important that we ensure diplomatic stability and open communication with China. I believe it is neither viable – nor in Europe's interest – to decouple from China. Our relations are not black or white – and our response cannot be either. This is why we need to focus on de-risk – not de-couple. And this is part of the reason why I will soon be visiting Beijing together with President Macron. Managing this relationship and having an open and frank exchange with our Chinese counterparts is a key part of what I would call the de-risking through diplomacy of our relations with China.
With tensions between the West and the People’s Republic of China (PRC) rising over Taiwan, how vulnerable are Europe’s wind markets? The news is largely positive: outside of rare earth elements (RREs), European wind markets do not suffer from outsized dependency on Beijing. Moreover, the West is working to reduce rare earth dependency by securing new mining and processing facilities, enhancing RRE supply; simultaneously, technological developments could limit demand for critical minerals. Europe should be wary of swapping dependency on Russian gas for reliance on Chinese clean energy, but the EU’s onshore and offshore wind supply chains are, with the important exception of rare earth elements, largely insulated from systemic rivals.
Applying lessons learned from the disastrous experience with Russia, European wind should continue to draw from China’s industrial base and engineering expertise but also ensure a competitive marketplace. The EU should continue to de-risk responsibly, seeking climate cooperation with Beijing while ensuring it is not held hostage to a sole supplier along any part of the wind energy supply value chain.
Russia Steals Oil Market Share in Asia From Energy Allies – Bloomberg
Russia is finding oil customers in Asia to replace sanctions-blocked European buyers — by clawing away at the market share of its energy allies.
From West Africa to the Middle East, producers in the OPEC+ alliance are feeling pinched as buyers in India and China — Asia’s top growth markets — scoop up cheaper Russian crude. The redrawn global oil trade map could be in place for years to come.
China’s generous and holistic industrial subsides should have been deployed in a technologically agnostic manner, as much of its wind industrial policy spending was wasted. The Chinese wind market’s overall capacity factor has historically lagged other markets, with some research showing real capacity factors below 23 percent as late as 2019, compared to utilization factors of over 34 percent in the US market. This low rate is due in part to the stunted growth in China’s most wind-rich provinces in the early 2010s due to a lack of transmission capacity, leading to significant curtailment. China’s actual wind generation is much less impressive than its deployment of wind capacity.
A key topic of discussion during the Chinese leader Xi Jinping’s recent visit to Moscow was the Power of Siberia 2 gas pipeline project planned to export Russian natural gas from the Yamal Peninsula in Western Siberia to China. In the wake of the war in Ukraine and ensuing collapse of trade with Europe that has left Russia’s gas reserves stranded, the pipeline has taken on new importance and urgency. While the terms of the contract remain under negotiation and shrouded in secrecy, the future outlines of its pricing formula can be discerned from the existing Russian-Chinese gas contract: for the original Power of Siberia pipeline.
Comment: I highly recommend this article if you have any interest in Chinese or Russian energy. It’s also worth noting that Vakulenko was head of strategy and innovations at Gazprom Neft until February 2022(!).
Taiwan’s rapid renewables push has created a bustling battery market - Canary Media
Taiwan faces two imperatives to decarbonize its grid: the looming threat of climate change, and the potentially more imminent risk of intervention by China’s military.
Over the past 10 years, the China-Central Asia Natural Gas Pipeline and the China-Kazakhstan Crude Oil Pipeline have traveled east across the vast desert and have become the energy "arteries" to ensure China's safe energy supply. Today, more and more green industries are heading west along the “Belt and Road”, providing support for the high-quality development of the five Central Asian countries.
6) Taiwan security issues
Hou vows protection of freedom and democracy – Taipei Times
The Chinese Nationalist Party’s (KMT) presidential candidate, New Taipei City Mayor Hou You-yi (侯友宜), yesterday pledged to protect Taiwan’s freedom and democracy amid “geopolitical” tensions.
At the KMT’s headquarters in Taipei, where dozens of the party’s executives and local government leaders rallied to show support, Hou vowed to adhere to the Constitution and preserve Taiwan’s free and democratic way of life.
As China Looms Over Taiwan’s Presidential Race, the Opposition Picks a Moderate – NYT
The Kuomintang nominated Hou Yu-ih, a popular mayor who has said little about geopolitical issues, as the party tries to appeal to voters wary of Beijing.
Comment: Good on the KMT, although cross-Strait ties will very likely become more contentious regardless of the outcome of Taiwan’s January 2024 presidential election.
Back Taiwan militarily, Swedish legislators say – Taipei Times
Two members of the Swedish parliament’s Committee on Foreign Affairs have urged their government and the EU to provide military support to Taiwan if needed.
Swedish lawmaker Joar Forssell of the Liberals on Saturday told Swedish broadcaster SVT that the EU and Sweden must assist Taiwan militarily if China attacks.
His comments came after Swedish lawmaker Markus Wiechel of the Sweden Democrats on Wednesday told the broadcaster the same thing.
There is little chance that Beijing will seek to invade Taiwan in the near term. Still, military-related risks are rising as the Chinese armed forces become qualitatively more capable and quantitatively larger.
Additionally, Western defense industrial supply chains are already being stretched by the war in Ukraine, creating some tradeoffs between supplying kit to Kyiv or Taipei.
Accordingly, Eastern European countries should invest in military armament production lines for Javelins, air-defense systems, short-range anti-ship missiles, and other anti-access/area denial (A2AD) capabilities.
Expanding production rates for these capabilities will positively impact the security of Ukraine, Taiwan and, ultimately, eastern Europe.
Buying Time: Logistics for a New American Way of War – Chris Dougherty of CNAS
The Department of Defense has systemically underinvested in logistics in terms of money, mental energy, physical assets, and personnel. Neglect of logistics arguably became most severe in the post–Cold War era. Pressure to save money through efficiency and misguided attempts to run the department like a “lean” business disproportionately impacted logistics. Maximizing the ratio of combat “tooth” to logistical “tail” saved money, but at the cost of leaving U.S. armed forces with a logistical system that is stretched thin supporting peacetime operations and wholly unsuited to the demands of warfare with China or Russia.
Saudi Arabia alone has just over 40 billion in new purchases of U.S. weapons over this time period. Redirecting a large portion of these arms and the production capacity it takes to produce them toward Taiwan would make a big difference when it comes to speeding and expanding Taiwan’s arms deliveries. For instance, even today Taiwan waits behind Saudi Arabia for its 750 Harpoon missiles, despite its far more urgent need for these systems.
How China’s Echo Chamber Threatens Taiwan – Tong Zhao of Carnegie/Princeton for Foreign Affairs
But the main factor that will determine whether Washington and Beijing come to blows over Taiwan is not necessarily Xi’s strategy for unification but the idiosyncrasies of China’s political system. The dynamics among China’s political leadership, its policy elite, and the broader public have generated an internal feedback loop that is not entirely within Xi’s comprehension or control. This could result in China’s being fully mobilized for war even without Xi deciding to attack Taiwan.
7) Notable
So-called "rules-based international order" reveals U.S. hegemony – People’s Daily [May 13th]
Fabricating the so-called "rules-based international order" narrative, the United States aims at explaining and applying international law at its own will and monopolizing the right to define international rules and order. The more ambiguous the "rules" and "order" are, the more discretion the United States enjoys. Any country could be labeled as a "rules and order breaker" for any practice that touches upon the hegemonic interests of the United States.
American columnist Peter Beinart noted that "Since the 'rules-based order' is never adequately defined, America's claim to uphold it can never be disproved."
Imagine if Another Bernie Sanders Challenges Joe Biden – Peter Beinart of CUNY for the NYT [May 8th]
On China, [US President Joseph Biden is] leading the United States into a cold war that imperils public health, ecological survival and global peace. Next year’s election offers the best chance to make him change course. But only if some enterprising progressive puts foreign policy on the ballot.
Comment: I don’t know even know where to start. This analysis ignores the PRC’s agency in fostering tensions and overlooks Beijing’s track record on “public health, ecological survival, and global peace.” While we will likely never get a full accounting of the origins of COVID-19, due to Beijing’s intentional efforts, the PRC utterly failed to take basic steps to prevent the emergence of a pandemic. Once the virus emerged, it attempted to hide critical information from the international community and, at a minimum, did nothing to prevent COVID from spreading internationally.
Regarding “ecological survival”: China consumes about half of the world’s coal; it also clipped US-China talks on methane reduction in 2022. Washington and Brussels absolutely need to engage with Beijing on climate, but the fault does not lie with the West.
Finally, Beijing has not advocated for global peace – in fact, its diplomatic and economic support for Moscow is arguably sustaining Russia’s invasion of Ukraine.
Joe Webster is a senior fellow at the Atlantic Council and editor of the China-Russia Report. This article represents his own personal opinion.
The China-Russia Report is an independent, nonpartisan newsletter covering political, economic, and security affairs within and between China and Russia. All articles, comments, op-eds, etc represent only the personal opinion of the author(s) and do not necessarily represent the position(s) of The China-Russia Report.