Still no bilateral call between Xi, Zelenskyy
Huawei suspends Russia work; all eyes on the French Presidential election
It’s been almost two weeks since reports emerged about a possible heads-of-state bilateral phone call between China and Ukraine. On Monday, the PRC MFA dodged a question about a bilateral leaders phone call, saying that “China has expounded on its position on the Ukraine issue on multiple occasions.”
While the PRC continues to support Putin rhetorically and symbolically, it is nevertheless substantively complying with most Western sanctions against the Kremlin. On Wednesday, Huawei reportedly suspended its Russian operations and placed employees on leave. The Chinese telco’s exit from the Russian market, if implemented, could deal a major blow to the Kremlin, as Nokia and Ericsson have also announced they would suspend their Russian business operations.
The Huawei episode is the latest piece of evidence suggesting that Beijing appears increasingly uncomfortable with the economic impacts of Putin’s invasion, even if it remains reluctant to expressly criticize the invasion. Xi and MBS also held a bilateral phone call this week, potentially because Beijing is leaning on Riyadh to expand crude oil production amid sliding macroeconomic growth in China and around the world.
Turning to Russia, many experts believe that the conflict will drag on for months, or even years. I’m skeptical, however, that Moscow can sustain the conflict for much longer – at least at current intensity levels. The Russian economy is already facing severe difficulties and will soon face acute supply chain constraints; Russia’s ability to maintain reliable telecommunications without foreign suppliers is uncertain and could potentially constrain the Kremlin’s ability to monitor elites or even introduce social instability; and Moscow’s ability to replenish its military losses is highly uncertain. Finally, Russia’s monotowns represent an uncertain variable
I strongly suspect that Putin will seek to de-escalate in the weeks ahead after consolidating Russian territorial gains around Mariupol and the land bridge to Crimea. Putin’s calculus could change, however, depending on the outcome of the French Presidential election next week.
Le Pen and the French Presidential election
Finally, a long-time reader (and friend of a friend, and someone I respect) reached out with the following question/comment:
“Joe, I appreciate your report. Could you expand on what qualifies Ms. Le Pen as an “extremist.” Also, pro-Putin.”
Here’s a (partial) list of why I categorize Le Pen as a pro-Putin extremist:
· Le Pen sought – and accepted – cash and electoral assistance from the Kremlin in 2014, 2015, and again in 2017. In my view, soliciting assistance from an adversarial foreign power is disqualifying, at best, and treasonous at worst.
· The North Atlantic Treaty Organization, or NATO, may be the world’s most effective institution at expanding peace and prosperity. Ms. Le Pen seeks to sharply reduce NATO’s influence or even dismantle the institution altogether, all in the hopes of reaching a rapprochement with Putin.
· Le Pen seeks to exit renewables by banning wind turbines and even dismantling existing projects. It’s difficult to overstate how disastrous this policy would be for French and European interests, as renewables – particularly already-installed renewables – are often more efficient than hydrocarbons such as oil, gas, or coal. Le Pen’s bizarre, Hugo Chavez-esque policy, if enacted, would light billions of Euros on fire while increasing French and European dependence on Russian natural gas.
Table of Contents:
1. PRC Ministry of Foreign Affairs
2. People’s Daily
3. Beijing increasingly uncomfortable with the war’s economic dislocations
4. RIC (Russia-India-China)
5. China and Russia in Energy Markets
6. Worth Your Time
1. PRC Ministry of Foreign Affairs
Foreign Ministry Spokesperson Zhao Lijian’s Regular Press Conference on April 15, 2022 – PRC MFA
TASS: First question. Alexander Sergeev, President of the Russian Academy of Sciences, said the other day the Chinese Academy of Sciences put their cooperation with their Russian counterpart “on hold”. Can you confirm this? How do you comment on the people-to-people exchanges between China and Russia on these areas? My second question is about Taiwan. US National Security Advisor Jake Sullivan said yesterday that “if China were to invade Taiwan”, the US government policy is that “we’re going to take every step we possibly can to ensure that never happens”. Do such remarks amount to interference in China’s internal affairs? US Senator Graham and others visited China’s Taiwan region on April 14. Does the visit violate the one-China principle? Does the foreign ministry have any comment?
Zhao Lijian: On your first question, to our knowledge, China and Russia are continuing cooperation and exchange activities in science and technology as scheduled. Guided by the vision of everlasting friendship and win-win cooperation, the two sides will advance relevant cooperation in a practical manner.
Cooperation in science and technology, as an important part of China-Russia practical cooperation, has been gaining momentum in recent years. The China-Russia Year of Scientific and Technological Innovation was successfully held from 2020 to 2021, during which over 1,000 innovative cooperation and exchange activities were held, delivering fruitful results. This has opened new ground for future cooperation and testified to the immense potential and broad prospects of bilateral scientific and technological cooperation.
Foreign Ministry Spokesperson Zhao Lijian’s Regular Press Conference on April 14, 2022 – PRC MFA
China Daily: Russian Foreign Ministry Spokeswoman Maria Zakharova said the accusation of Russia’s use of chemical weapons is unfounded and the goal is to divert the international community’s attention from the biological laboratories discovered in Ukraine. Does China have any comment?
Zhao Lijian: I have noted the remarks. Indeed, the US has not yet given any convincing explanation for its bio-military activities. Undertaking consultation and cooperation to address concerns is a requirement of the Biological Weapons Convention (BWC). The US has no right to reject discussions on the issue.
The US remarks have so far been ambiguous and even self-contradictory, which aroused greater suspicion from the international community. People are asking: How many cooperation facilities is the US running across the world? How many biological samples did the US ship out of Ukraine according to bilateral agreement with the country and for what purpose? What is the sensitive information that Ukraine is not allowed to make public according to the agreement? Did the US conduct dangerous research overseas that is prohibited in the US?
Radio Television Hong Kong: US Treasury Secretary Janet Yellen urged China to take actions to end Russia’s military operations in Ukraine, otherwise China’s international standing will be at stake. What is China’s response?
Zhao Lijian: China holds an objective and just position on the Ukraine issue. We support dialogue and negotiation, and actively provide humanitarian assistance to Ukraine and other affected countries. We have made great efforts to help deescalate the situation, resolve the crisis and rebuild peace.
We believe that all countries’ sovereignty and territorial integrity should be respected and upheld, and that there’s no place for double standards in international relations. Ukraine’s sovereignty and security should be upheld. [Comment: What should be done to ensure Ukraine’s sovereignty and security then?] Russia’s legitimate security concerns should also be respected. Europe’s peace and stability should be defended, and the same goes for other countries. We firmly oppose any distortion and smearing of China’s position.
Foreign Ministry Spokesperson Zhao Lijian’s Regular Press Conference on April 13, 2022 – PRC MFA
Bloomberg: President Joe Biden says the killings by Russian troops being uncovered in Ukraine qualify as a genocide. Does the Chinese foreign ministry have a comment on this?
Zhao Lijian: We have noted relevant reports. On the Ukraine issue, China always believes that the top priority is that all relevant parties remain calm, exercise restraint, cease hostilities as soon as possible and avoid humanitarian crisis on a large scale. All efforts of the international community should help to deescalate the tension instead of adding fuel to the flame, and promote diplomatic settlement instead of heightening tensions.
Seoul Broadcasting System: According to ROK media reports, the ROK government discovered a mobile oil drilling structure installed by the Chinese side in disputed waters, or the provisional measure zone, and held a National Security Council meeting to discuss countermeasures. What is China’s comment?
Zhao Lijian: I’m currently not aware of the situation you mentioned. I can tell you that China and the ROK are advancing negotiations of maritime boundary delimitation. The two sides also established the dialogue and cooperation mechanism of maritime affairs. The two countries are in sound communication on maritime issues under existing mechanisms.
Comment: Nikkei reported that South Korea’s incoming administration sought to attend an upcoming Quad summit as an observer; President-elect Yoon’s team denied that any request occurred, however. On Friday, South Korea announced its plan to accede to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). Taiwan and the PRC submitted their own accession bids to CPTPP in September 2021.
Foreign Ministry Spokesperson Zhao Lijian’s Regular Press Conference on April 11, 2022 – PRC MFA
Reuters: Just now you talked about the need for dialogue. When is China going to have high level dialogue with President Volodymyr Zelenskyy?
Zhao Lijian: China has expounded on its position on the Ukraine issue on multiple occasions. It is China’s consistent belief that the Ukraine crisis can only be resolved through dialogue and negotiation. China supports all efforts that are conducive to easing the situation and political settlement. And China opposes actions like fanning the flame or adding fuel to the fire that may escalate the situation and are counterproductive to political resolution. Since the Ukraine crisis broke out, China has been actively promoting peace talks, speaking for and working for peace. I’m sure you have noted that State Councilor and Foreign Minister Wang Yi has spoken with his Ukrainian counterpart. As to your specific question, we will release more information on a timely basis if there’s any. I have nothing to offer at the moment.
AFP: I’d like to go back to the attack in Kramatorsk if that’s okay. Both Ukraine and Russia have blamed each other for this attack, although the US, the EU and the UK have just blamed Russia. Does China also think Russia did it?
Zhao Lijian: We also noted that Russia and Ukraine have very different assertions about the situation. Given what has happened in Syria and other places, conclusions have to be drawn based on facts. China supports just, independent and transparent investigation into the incident. Before the full picture is clear, all parties should exercise restraint and avoid making unfounded accusations and escalating the situation.
AFP: Just wanted to follow up one more time on the Serbia question. You just now said it was a bilateral arrangement between China and Serbia and wasn’t targeting a third party. But is China not worried in some way that completing arms transfers like this threatens what is at the moment a very fragile peace in that part of Europe?
Zhao Lijian: What do you mean by that question? Did you ever care whether regional peace and stability is threatened when the US sold arms to Europe and Taiwan? Why do you think it’s so when China sells some conventional military items to Serbia?
2. People’s Daily
The outbreak of the Russian-Ukrainian conflict has very complex historical and practical reasons. Among them, the long-term geopolitical confrontation between Russia and the West and the “extreme pressure” of the United States and Western countries on Russia after 2014 are external factors that cannot be ignored…
After the three Baltic countries and other Central and Eastern European neighbors have joined NATO successively, if Ukraine then joins NATO, Russia will lose an important strategic barrier.
俄乌冲突的爆发，有着非常复杂的历史经纬和现实原因，其中俄罗斯与西方之间长期的地缘政治对抗以及2014年以后美国及西方国家对俄罗斯的“极限施压”是不容忽视的外在因素。
在波罗的海三国等中东欧邻国先后加入北约后，如果乌克兰再加入北约，俄罗斯就会失去重要的战略屏障。
NATO's expansion to worsen Ukraine crisis, decay European security – People’s Daily
Transferring massive weapons to Ukraine, massing a large number of troops in eastern Europe, and welcoming Sweden and Finland to join the alliance, NATO has been very much engaged itself so far in the conflict between Russia and Ukraine.
Analysts say NATO's disregard of Russia's legitimate concerns on security issues and its continuous expansion is the root cause of the outbreak and escalation of this conflict. If it continues to slim down the small buffer zone left between Russia and itself, the situation will undoubtedly go worse.
…
Dmitry Belik, a member of Russia's State Duma Committee on International Affairs, said on Monday that NATO seeks to build up its military presence near the Russian borders, but the entry of Finland and Sweden into NATO will not benefit these countries, and "Russia will not watch this indifferently."
"This issue seriously affects our security, so we will be forced to take retaliatory steps," he told the Izvestia newspaper.
"The accession of Finland and Sweden to NATO puts them in a very difficult position," he added.
According to military expert Viktor Litovkin, in the event that Finland and Sweden decide to join NATO, Russia will justifiably strengthen the Russian-Finnish border, as well as the entire water area of the Gulf of Finland.
"Russia will have to strengthen ground forces and air defense, deploy significant naval forces in the Gulf of Finland in the event of Finland and Sweden joining the alliance," the expert noted.
Comment: I’m assuming that Litovkin is contemplating (threatening?) deployments of submarines, not surface warships. The Russian surface fleet’s performance in the Black Sea suggests it would fare very poorly in the even more cramped waterways of the Gulf of Finland.
3. Beijing increasingly uncomfortable with the war’s economic dislocations
IMF to downgrade forecast for over 140 economies amid Russia-Ukraine conflict – People’s Daily
The International Monetary Fund (IMF) chief said Thursday that the organization will revise down its global growth forecast amid the Russia-Ukraine conflict, the impact of which will contribute to downgrades for 143 economies this year.
"To put it simply: we are facing a crisis on top of a crisis," IMF Managing Director Kristalina Georgieva said in a curtain raiser speech ahead of the 2022 spring meetings of the IMF and the World Bank scheduled next week.
Comment: Unstated subtext here is that the CCP is increasingly worried about Chinese GDP growth prior to the 20th Party Congress, which is slated to occur in late 2022.
Facing Crisis Upon Crisis: How the World Can Respond – IMF
The global recovery was already losing momentum before the war in Ukraine, partly because of Omicron-related disruptions.
In January, we cut our global growth forecast to 4.4 percent for 2022. Since then, the outlook has deteriorated substantially, largely because of the war and its repercussions. Inflation, financial tightening, and frequent, wide- ranging lockdowns in China—causing new bottlenecks in global supply chains—are also weighing on activity.
As a result, we will be projecting a further downgrade in global growth for both 2022 and 2023. Fortunately, for most countries, growth will still remain in positive territory. That said, the impact of the war will contribute to forecast downgrades for 143 economies this year—accounting for 86 percent of global GDP.
A major Chinese telecommunications equipment maker is scaling back its operations in Russia to avoid getting hit by US sanctions related to the ongoing war in Ukraine, two Russian-language news outlets reported.
Comment: Between the apparent bilateral tussle over Kazakhstan’s CPC crude oil terminal; Huawei’s apparent compliance with sanctions; the PD’s quiet warnings of lower economic growth; and, most importantly, economic conditions within China itself, Beijing appears increasingly uncomfortable with the economic dislocations caused by the invasion.
4. RIC (Russia-India-China)
US President Joe Biden is expected to visit Japan for the QUAD summit in late May, a move which experts see as a further attempt to showcase US leadership in the Indo-Pacific region and as another try with Japan and Australia to influence India to sway its stance on Ukraine crisis.
Hyping the China threat during the QUAD summit would be an effective tactic to canvass India, who the US has failed to nudge for a stronger stance against Russia. But India's reluctance to coordinate on the issue would render the QUAD mechanism weaker and substantial results are unlikely to be achieved from the meeting, experts predicted.
Readout of President Biden’s Call with Prime Minister Modi of India
President Joseph R. Biden, Jr. spoke today with Prime Minister Narendra Modi of India to inaugurate the fourth U.S.-India 2+2 Ministerial Dialogue. Together, they committed to strengthening the U.S.-India relationship through cooperation on clean energy, technology and military cooperation, and expanded economic and people-to-people ties. They also committed to continue cooperation – bilaterally and multilaterally – on ending the COVID-19 pandemic, strengthening global health security, advancing global food security, and ensuring a free and open Indo-Pacific. They emphasized their shared commitment, as leaders of the world’s largest democracies, to respect for the sovereignty and territorial integrity of all nations in the Indo-Pacific and beyond. The two Leaders also discussed the destabilizing impacts of Russia’s war against Ukraine, with a particular focus on global food supply. President Biden and Prime Minister Modi looked forward to meeting in person later this spring, in Tokyo, for the Quad summit.
5. China and Russia in Energy Markets
Xi Jinping Speaks with Saudi Arabia's Crown Prince Mohammed bin Salman on the Phone – PRC MFA
On the morning of April 15, 2022, President Xi Jinping had a phone conversation with Saudi Arabia's Crown Prince Mohammed bin Salman.
Xi Jinping asked Mohammed to convey his greetings to King Salman bin Abdulaziz Al Saud. Xi Jinping pointed out that given the profound and complicated changes in the international and regional situations, the strategic and overarching significance of China-Saudi Arabia relations has become more evident. Over the past year, China and Saudi Arabia have made joint efforts to promote the new development of bilateral relations. The Chinese side gives priority to developing relations with Saudi Arabia, and stands ready to work with Saudi Arabia to continuously deepen China-Saudi Arabia comprehensive strategic partnership and bring more benefits to the two countries and the two peoples.
Xi Jinping stressed, the Chinese side supports Saudi Arabia in safeguarding national sovereignty, security and stability, and independently exploring a development path suited to its own national conditions. [Comment: Read that as: Beijing will not criticize Riyadh’s human rights record]
Mohammed conveyed King Salman's greetings to Xi Jinping, and once again congratulated China on the success of the Olympic and Paralympic Winter Games Beijing 2022.
…
Saudi Arabia attaches great importance to China's status and to the development of its relations with China, and firmly adheres to the one-China principle. Saudi Arabia will continue to staunchly support China's legitimate positions on such issues concerning core interests as Xinjiang, resolutely oppose any interference in China's internal affairs, and firmly safeguard the rights of all countries to independently choose their own political and human rights paths.
[Comment: Read that as: Riyadh will not criticize Beijing’s human rights record]
China reports 500 hydrogen fuel cell vehicles output in March – Jian Wu for China Hydrogen Bulletin
China has just released the figure of hydrogen fuel cell vehicle production of March 2022, which indicates the sector continues its momentum, even the country is enduring the worst pandemic situation since the outbreak of 2020.
Comment: I’ve subscribed to the China Hydrogen Bulletin.
Russia boosts export quotas for fertilizers by almost 700,000 tons until May 31 – TASS
Russian Prime Minister Mikhail Mishustin signed a decree to boost the export quotas for fertilizers until May 31, the cabinet said on its website on Sunday.
"Current export quotas for Russian fertilizer producers have been temporarily increased by almost 700,000 tons," the cabinet said in a statement. "Prime Minister Mikhail Mishustin has signed an order to that effect."
Comment: This announcement is likely driven by economics, not politics. Natural gas is an important input into fertilizer prices, and Russian nat gas prices are (artificially) low, incentivizing domestic ammonia/fertilizer production.
6. Worth Your Time
Between 2019 and 2021 the combined operational space fleets of China and Russia have grown by approximately 70 percent. This recent and continuing expansion follows a period of growth (2015–2018) where China and Russia had increased their combined satellite fleets by more than 200 percent. The drive to modernize and increase capabilities for both countries is reflected in nearly all major space categories—satellite communications (SATCOM), remote sensing, navigation-related, and science and technology demonstration. Since early 2019, competitor space operations have also increased in pace and scope worldwide, China’s and Russia’s counterspace developments continue to mature, global space services proliferate, and orbital congestion has increased.
…
China and Russia are developing new space systems to improve their military effectiveness and reduce any reliance on U.S. space systems such as the Global Positioning System (GPS). Beijing and Moscow have also created separate space forces. As China’s and Russia’s space and counterspace capabilities increase, both nations are integrating space scenarios into their military exercises. They continue to develop, test, and proliferate sophisticated antisatellite (ASAT) weapons to hold U.S. and allied space assets at risk. At the same time, China and Russia are pursuing nonweaponization of space agreements in the United Nations. Russia regularly expresses concern about space weapons and is pursuing legal, binding space arms control agreements to curb what it sees as U.S. strength in outer space.
Huawei pauses Russia operations as Beijing denounces NATO – Joe Webster of C-R Report for SupChina
In a major blow to Moscow, Huawei announced it would furlough Russian employees for the month of April. But even as China largely complies with the substance of sanctions, Beijing’s rhetorical support for Moscow shows no signs of letup.
Taiwan moves away from COVID-zero as cases climb – Jordyn Haime for SupChina
On Tuesday, Taiwan reported 551 domestically-transmitted cases of COVID-19, its highest single-day count in 2022.
…
But there’s little fear or panic in Taipei, as most residents continue to travel domestically, work in person and attend restaurants, bars, and large gatherings. It’s a far different picture from last summer’s outbreak that resulted in a “Level 3” epidemic alert that heavily limited those activities.
But the gaslighting and falsehoods masked an important truth about why Putin and Lukashenka were meeting now. As Russia shifts its tactics, abandoning for the time being its efforts to take Kyiv in favor of an assault on eastern and southern Ukraine, Belarus’s role in the war is also undergoing a transformation.
In the run-up to the meeting, Lukashenka, who has allowed Russia to use Belarusian territory as a staging ground for its assault on Ukraine, complained bitterly about being labeled “an accomplice of the aggressor.” He also repeatedly demanded that Belarus be a party to any talks to resolve the war. Meanwhile, Belarus recently published a list of unfriendly countries that pointedly did not include Ukraine.
The Kremlin is also playing along with these apparent attempts to reframe the Belarusian role in the war. In recent days, Russian Foreign Minister Sergei Lavrov suggested, apparently with a straight face, that Belarus should be one of the “neutral” countries that could provide security guarantees to Ukraine in the event that Kyiv declares its neutrality.
Moskva sinking: What really happened to the pride of Russia's fleet? – CNAS via CNN
But some analysts said the Moskva's sinking has limited relevance for the situation in East Asia.Thomas Shugart, a former US Navy submarine commander who is now an analyst at the Center for a New American Security, said there were too many differences between the situations.
The Moskva's air defense systems are not in the same league as the more modern Aegis systems on US Navy destroyers, and Ukrainian anti-ship missiles are not as good as Chinese ones, Shugart said.And Soviet-era warships like the Moskva have been typically "known for their offensive punch, not for their defensive systems or their damage control," Shugart said.
v/r,
Joe Webster
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.