Along with the rest of the world, China — even with its strong intelligence-gathering capabilities — was shocked by the outbreak of war in Ukraine. In the judgment of China's strategic elites, Russian President Vladimir Putin would not and should not make a massive military intrusion because, objectively, deploying troops on the border, recognizing two new independent republics and sending peacekeeping troops into eastern Ukraine would be quite sufficient for Russia to achieve its strategic objectives. Those objectives were:
• to impose neutrality on Ukraine — that is, Ukraine would not join NATO);
• to expose American “lip service” to European security; and
• to drive a wedge between the United States and Europe, since the two have different interests and approaches with regard to the crisis.
Nevertheless, a large-scale military operation was launched, which meant that President Putin either had a larger ambition or sensed a bigger threat that could only be contained by means of war.
The outbreak of the Russia-Ukraine conflict put China in an awkward situation. China and Russia are comprehensive strategic partners. President Putin even attended the opening ceremony of the Beijing Winter Olympics and joined his Chinese counterpart in a lengthy joint statement vowing to continue strategic cooperation in all aspects.
Even after the outbreak of armed violence, U.S. President Joe Biden and senior American officials repeatedly called China the “most serious” challenger to the U.S., and the American Indo-Pacific Strategy was strengthened to further support the containment of China. These things made it impossible for China to join the U.S.-led Western camp against Russia, because that would not serve China's interests at all.
China insists on a peaceful development strategy, adheres to multilateralism, takes an active part in promoting global governance and wants to establish a worldwide community with a shared future for mankind through the Belt and Road Initiative and other measures. All of this is meant to project a peace-loving and constructive image to the world. The Russia-Ukraine conflict, however, seems to have confirmed the perception that Russia is a negative factor in international affairs that maintains its image and influence as a great power only by showcasing its enormous capacity for destruction. This contradicts China's effort to establish a positive image as a builder committed to maintaining peace and contributing to the world.
For China's own sustainable development — which requires a peaceful and prosperous international environment — it is not in its interest to strengthen relations with Russia at the expense of relations with the U.S. and Europe. Since the start of the conflict, China has tried to separate its relations with Russia from those involving Europe and the U.S. and to determine its position and approach on the basis of independent judgment regarding the merits of the matter itself.
Therefore, China insists on “principled neutrality” with the aim of peaceful resolution of the conflict. This can be summarized in four-points:
1. The inviolability of sovereignty and territorial integrity of all sovereign states, including Ukraine, must be upheld. China opposes war and calls for and does all within its power to promote the peaceful settlement of the Russia-Ukraine conflict.
2. A Cold War mentality and the Cold War behavior that ensued are the root cause of the conflict. As a military alliance, NATO sprang from the Cold War, in opposition to the Soviet-led Warsaw Treaty Organization (Warsaw Pact). With the collapse of the Soviet Union and the Warsaw Pact in 1991, NATO had accomplished its mission. However, it has continued not only to exist but also to expand eastward. This is typical Cold War behavior guided by Cold War mentality, which is the essential cause of this disaster. Therefore, abandoning the Cold War mentality and behavior is the fundamental way out — at least if the conflict is to be settled peacefully.
3. China stands ready to actively work with European countries in support of their effort to find a peaceful resolution. To this end, President Xi Jinping has had rounds of phone conversations and online meetings with German and French leaders. In this regard, China is supportive to the Normandy format — i.e., quadrilateral negotiations involving France, Germany, Russia and Ukraine.
4. China will, as always, maintain its normal and friendly relations with Ukraine and provide humanitarian assistance. Its ambassador to Ukraine vowed publicly that China would never attack Ukraine.
To sum up, China is not part of the Russia-Ukraine conflict at all, but it is willing to be part of a peaceful solution.
Possible endings for the war
Since Russia underestimated the determination and strength of the Ukrainian resistance to its military incursion and overestimated its own military capabilities, it experienced setbacks in the initial stages of its “special military operation” and had to withdraw from its all-out offensive. On the other hand, with the massive assistance of the U.S. and NATO, Ukraine has shown high morale in defending the country. The U.S.-led West seems to have achieved unprecedented solidarity in bitter hatred of a common enemy. Thus, the Biden administration has adopted a strategy aimed at defeating Russia and even bringing about regime change. But this strategy is problematic: Under its guidance there can be but three possible outcomes to the ongoing conflict:
1. Russia is defeated, which is virtually impossible in reality. It's wishful thinking, unless the U.S. and NATO get directly involved in the war or systematically provide Ukraine with heavy weaponry and help it gain a certain level of command of the air. Otherwise, Ukraine will never be able to launch offensives and will never defeat Russia. Even providing heavy weapons, but especially direct involvement by the U.S. and NATO, would inevitably lead to escalation of the conflict, which might lead the entire world into a potentially devastating catastrophe. Thus, the end of the war could be the end of us all.
2. A protracted war of mutual intransigence. Some Western strategists clamored to turn Ukraine into another Afghanistan for Russia. Nothing can be more absurd than this kind of thinking. Afghanistan is in a remote land-locked periphery, with limited influence on the surrounding region, while Ukraine is in the heart of Europe and vital to the stability and development of the continent as a whole. As long as Ukraine remains a battleground, not only Russia and Ukraine but also the U.S. and Europe will be caught in what I call the “Ukraine trap” — an endless self-consuming game. With a prolonged war, not only will the U.S. and Europe be more likely to part company but social and economic turmoil may follow in many parts of the world, Europe in particular. After all, the continuing war poses an ongoing security threat, and a hardly tolerable economic predicament, to Europe and beyond.
3. Russia wins the war, which will not only dramatically worsen the security environment throughout Europe but also impact on the very foundation of the U.S.-led international system. Disastrous consequences for global peace and stability would follow. Indeed, the current strategic objective of defeating Russia is emotional and irrational, and it has fostered unrealistic political correctness. After all, when we think of ourselves as being absolutely right and of those on the opposite side as being absolutely wrong, we are close to Hell. A more rational approach is to change the unrealistic strategic objective and find a practical compromise to end the war as soon as possible and institutionalize peace in the form of a treaty. In this sense, the Normandy format and the negated Minsk Protocol are at the least worth serious reconsideration.
On China-U.S. relations
The current “competition” between China and the U.S. was initiated by the latter. Beneath the facade of competition, however, the most formidable challenges for both countries come from within. America's foreign policy is being held hostage by irreconcilable socio-political divisions and political polarization within the country. At the heart of this is a great divide in national identification between U.S. citizens on either side who see themselves as representing the true America and Americanism and see those on the other side as an evil force that will bring the country to ruin. The two are thus at loggerheads.
To make things worse, the Biden administration and the Democrats face an uphill battle in the midterm elections. It is generally predicted that the Democrats will lose substantially and that the Biden administration will become a lame duck for two additional years. As such, the room for policy maneuvering will be more limited. The only way to maintain effective policy is to play tough, as any sign of weaknesses will provide the other side with a target and ammunition. This will be the case on the Russia-Ukraine war, and even more so on China, leading to a highly irrational policymaking process.
In this connection, I have always believed that the high degree of uncertainty in American politics is an obstacle to the healthy development of U.S.-China relations. Under such circumstances, maintaining the stability of the relationship is already difficult; improving it will be even harder.
On the Chinese side, the country's rapid growth, combined with continued U.S. repression since Donald Trump — including the attempt to gang up against China in the Indo-Pacific region — have led to a sustained upsurge of anti-American nationalistic sentiment, putting pressure on rational decision-making. Moreover, China now faces a series of political and social pressures as a result of its economic restructuring and deepened reforms. At the upcoming 20th National Congress of the Communist Party of China, the Party's top leader must maintain his authority in decision-making in order to effectively implement any guidelines and policies that are adopted. Under such circumstances, in the face of unwarranted pressure from the U.S., Chinese leaders are in no position to show weakness. They must resolutely safeguard Chinese interests and protect China's sustainable development.
Nonetheless, cooperation between the world's two most powerful countries will inevitably bring stability and more benefits to both — and to the world as a whole. There are indeed areas of solid common ground between China and the U.S. nowadays. The maintenance of global financial stability is their strongest common interest.
Nearly 60 percent of global trade is directly or indirectly related to China, the world's largest trading nation, whose exports account for 28 percent of the total. Yet only 2.6 percent of trade is paid for in Chinese yuan. Of the world's $12.8 trillion in foreign exchange reserves, China holds nearly 3.5 trillion, of which the U.S. dollar accounts for nearly 60 percent and the yuan only 2.7 percent. Therefore, before the yuan is fully internationalized, a collapse of the global financial order would be a major disaster for China, as well as for the U.S..
The current situation is very dangerous. On one hand, the U.S. Federal Reserve has printed more than $4 trillion in unbridled quantitative easing to prevent an economic downturn. On the other, the all-in sanctions on Russia are fueling global inflation. In an effort to curb runaway inflation, the Fed has moved to raise interest rates and reduce the size of its balance sheet more aggressively than expected. But because of sharp rises in commodity prices caused by the crippling sanctions, such a drastic reduction of the balance sheet is too little and too late to curb runaway inflation.
That leaves the U.S. economy on the brink of stagflation and recession. In this case, only collaboration between China and the U.S., the two largest economies, may be effective in preventing a financial meltdown, which could be even worse than the one in 2008. Global financial stability is critical to overcoming the current economic malaise and holding off recession.
Preventing a disastrous confrontation between China and the United States bears not only on the two countries but also on the rest of the world. After all, a necessary condition for irreversible confrontation between them is the world's division into two ideologically opposed, economically independent and militarily antagonistic warring political camps. This is the greatest lesson of the Cold War. We humans should not be so stupid as to slide back into Cold War mistakes — mistakes we rectified at great cost just four decades ago
Thus, preventing China-U.S. conflict and bringing relations back to the right track of cooperation, rather than confrontation, depends not only on the two countries but also on the entire international community. I believe that after a period of competition the U.S. will finally realize that it's not feasible to oppress China by way of confrontation. That way only hurts both sides and comes with huge negative, or even disastrous, effects for the world community. The international community has a responsibility and a vital interest in helping the U.S. recognize this mistake. The sooner it is recognized, the sooner China-U.S. relations will return to the right track.
(The foregoing article is based on the author's speech at the III FORO International Expansion on June 8 in Alcala de Henares, Spain.)
