"Another leap forward."

China wins in Ukraine.

Give me your wheat, your oil, your gas, your strategic metals. Shanghai. (Tibor Végh, cc by 3.0/ Wikimedia Commons.)

18 MARCH—The intensifying Russo–Ukrainian war will almost certainly end poorly for Ukraine. There has been a huge exodus of Ukrainians into neighboring countries fleeing the war (3 million and counting), and what’s left of the country is likely to be dismembered. The war has also engendered significant economic dislocation in Russia, as the West’s increasingly broad sanctions have come to bite. Thus far, America’s European allies have avoided following the U.S. with a total ban on Russian oil and gas imports, which would just as certainly cripple Europe and send more Russian products east rather than west: a fleck of sanity amid a frenzy of misjudgments.  

But regardless of how events ultimately play out in Ukraine, it is China that is likely to emerge the long-term winner. Oddly enough, or unexpectedly, the Ukrainian conflict has opened an opportunity for a diplomatic revolution that could position Beijing as a peacemaker—not just in its neighborhood but in Europe as well—a Pax Sinica, if you will. However deep the involvement of China in what is today primarily a Slavic dispute, it is almost certain that the crisis will catalyze an ongoing shift of economic power, evident for some time, from the U.S. to a China-dominated Asia–Pacific. 

Subtly but steadily, China has assumed a more central role in the crisis. While Beijing has supported Moscow’s intervention in Ukraine from the first, it has also made clear from the first its desire to see a diplomatic solution to a confrontation that turned from cold to hot on 24 February. President Xi has since made this point in still-courteous but ever-plainer terms.  

China must tread delicately here:  Earlier this week, President Biden’s national security adviser, Jake Sullivan, threatened Beijing with “consequences” for any large-scale evasion of U.S. sanctions or support to Russia to backfill them. In response, Foreign Ministry spokesperson Zhao Lijian aggressively refuted Sullivan’s implication that Beijing was working to undermine the sanctions and urged the U.S. “to deeply reflect on the role it has played in the development and evolving of the Ukraine crisis,” reflecting a widespread view held by China (and others) that Russia was provoked by NATO’s expansion and threats to its security. Zhao’s statements were subsequently reinforced during Chinese President Xi Jinping’s telephone call with President Biden, Xi emphasizing that Beijing’s pressing priorities were “to keep the dialogue and negotiation going, avoid civilian casualties, prevent a humanitarian crisis, and cease hostilities as soon as possible.”

Indeed, Beijing has signaled repeatedly that it stands ready to play a constructive role in securing a ceasefire, saying it “deplored” the ongoing war, and was “extremely concerned” about the harm to civilians in Ukraine. At the same time, having joined President Putin to sign the much-noted Joint Statement on International Relations Entering a New Era 20 days before Russia made its move, Beijing has no interest in undercutting the import of what the two leaders effectively declared an emerging strategic alliance.

Let us not understate the ambition the two leaders expressed in that document. As they made plain, they view this moment as the opening of a new world order based on genuine multipolarity and mutual respect among nations. While the two stressed their statement was not “aimed” at any other nation, if you’re going to stand against unipolar hegemony in the 21st century you have only one nation to talk about. Ukraine, viewed through this frame, is a subset of a much larger dynamic. On Wednesday, indeed, Putin declared that the Ukraine crisis will mark the end of the West’s political and economic dominance. 

Even before the recent conflict with Ukraine, Russia and China had begun to elaborate a much broader alliance in terms of trade, mutual development assistance, fixed investment, technological cooperation, and the like. This has almost certainly guided Putin’s calculations regarding Ukraine. Absent Beijing’s support, it is highly improbable that the Russian president would have had the confidence to undertake the actions he initiated some three weeks ago.

‘Attempts by the U.S. authorities to politicize or unilaterally shut down access to the SWIFT system to secure U.S. policy objectives risks backfiring as far as preserving dollar hegemony.’

There is a financial dimension as well: The emerging Russo–Chinese partnership reflects the growing import of transactions denominated in yuan and rubles. This will undoubtedly increase now that a large number of Russian financial institutions, including the central bank, have been barred from using the U.S.–controlled SWIFT financial-settlement system.