Beijing watches how muscovy cracks
Will Beijing reclaim its lost territories?
Spoiler: There are at least three different ways China will react to the little internationally wanted war criminal and illegitimate “president’s” fiasco in Syria. In the first scenario, Xi Jinping increases his support of muscovy’s war machine by exporting critical components, in the second scenario, Xi Jinping freezes the support at the current level, and in the third scenario, Xi Jinping decreases his support for muscovy. Ukraine and her allies can influence Xi Jinping’s choice.
The little internationally wanted war criminal and illegitimate “president” has become increasingly useless for Xi Jinping. musvocy was never an alternative to the west in economic terms. putin has only been useful in diplomatic terms supporting China’s ambitions to become a global power. A weak muscovy leaving former Chinese lands unguarded may be regarded by China as an invitation to reannex the territories lost to muscovy during the “hundred years of humiliation”.
The little internationally wanted war criminal and illegitimate “president” has been courting Beijing for years hoping to get Xi Jinping’s full support in his genocidal war. Since muscovy is client state to China, putin had to ask for Xi Jinping’s approval and on Xi Jinping’s orders he waited until after the Winter Olympics in Beijing in 2022 to launch the full-scale invasion.
But the support from China has beeen limited. Xi Jinping has carefully taken notes of the little fascist in chief’s miscalculations. Especially interesting for Xi Jinping was the failure of the muscovy’s armies to defeat Ukraine in three days and the free world’s reactions to the full-scale war. So far, Xi Jinping has not been impressed. Neither by putin’s armies or by putin’s strategic thinking.
The little internationally wanted war criminal and illegitimate “president’s” strategic thinking has been put in question since his full-scale invasion of Ukraine began in February 2022. His reputation as such took a hard blow as his propped-up ally in Syria, the butcher Assad had to flee. Having to ask Türkiye for help to evacuate his troops from Syria, showed Xi Jinping how useless he is.
The master strategist
Source: Darth Putin
muscovy needs China but China does not need muscovy.
The fascist regime’s armies lose equipment faster than the industres can replace them. China has not sent weapons and ammunition to the extent that the kremlin wanted. China has however sent raw material and critical components which are needed for the production of advanced weapons such as missiles.
But except for cheap oil, muscovy has almost to nothing to offer China. muscovy’s goods and services constitute very small shares in Chinese domestic final demand. Goods and services from the “West” are much more important for China.
Total foreign value added shares in Chinese domestic final demand in 2020.
Source: OECD database. Trade in value added indicators. Note: “West” includes countries that provide aid to Ukraina and/or sanction muscovy.
As I showed in a recent post:
muscovy is relying on imports for many products that can be used in a war. China supplied a lot of those.
Relating Chinas shares value added share to total foreign value added shares in muscovy’s domestic final demand, shows that China holds a fifth of the foreign value added shares for all goods and services, almost a third of the foreign value added shares for all manufacturing goods, (13% of the value added in total final domestic demand), while the shares in services industris are smaller. Unfortunately, Chinese shares in foreign value added shares in muscovy’s final domestic demand for Electrical equipment and Computers & Electronics, and Metals are relatively high.
To be specific, Chinese value added shares in muscovy’s final domestic demand for goods produced by the industries mentioned above, amounted to 25%, 31%, and 10% respectively in 2020. Those shares are even higher now as shown by the Kyiv Economic School’s analyses of the effects of export controls: in 2023, China supplied more than 50% of all Russian battlefield-related imports (including critical components for the Russian army).
So muscovy needs China, but China does not need muscovy. Showing muscovy’s value added shares in Chinese final domestic demand and Chinese value added shares in muscovy’s final domestic demand yields the graph below.
muscovy needs China but China does not need muscovy.
Source: OECD database. Trade in value added indicators.
muscovy is useless. One can hardly see muscovy’s value added shares in the graph above. Not even for industries one expected them to important, such as Mining and Coke and Refined Petroleum.
The above shows that muscovy supply is of no consequnce for China. The “West” is of course also much more important for China on the demand side as our markets are much larger than muscovy’s. Even if one believes muscovy’s fake GDP statistics, it only amounts to some 8% of the US economy in 2024. Another indication of this is the complete absence of Chinese direct investments in muscovy. Since the full-scale invasion, The New Development Bank, (the BRICS’ bank), does not invest in any projects in muscovy.
The New Development Bank (NDB) applies sound banking principles in all its operations, as stated in its Articles of Agreement.
In light of unfolding uncertainties and restrictions, NDB has put new transactions in Russia on hold.
NDB will continue to conduct business in full conformity with the highest compliance standards as an international institution.
So, what’s the point with the fascists then, why doesXi Jinping continue to prop it up?
What is the point of muscovy for China?
Both countries want to increase their global influence. muscovy wants to restore its borders to the west and south while China has ambitions not only to invade Taiwan but also to expand in the South China Sea.
Both countries are dictatorships and therefore despise the West’s liberal world order and its principles of democracy and human rights. They are also united in their view of USA as an enemy and opponent to their ambitions to dominate their respective parts of the world.
Tangible results of their common ambitions and “values” show up as diplomatic cooperations in the UN, BRICS, the Shanghai Cooperation Organisation (SCO), in military exercises in the Pacific Ocean and the South China Sea. They also seek to increase their influence in Africa.
A stick and a carrot to make Xi Jinping severe the ties with muscovy.
A stick
Given putin’s miscalculations and failures, the first scenario of an increased Chinese support is the least likely. The second scenario with business as usual is more likely, and so far the most likely. So what does the West needs to do to make Xi Jinping choose the third scenario and abandon putin?
This year’s Economics Prize laureate Simon Johnson and Oleg Ustenko, former economic adviser to President Zelenskyy, have some suggestions that might do the trick. Financial sanctions and Chinese refulas to accept muscovy debt, makes the kremlin desperate for cash. It gets that by selling oil. Trump has noticed how weak the internationally wanted war criminal and illegitimate “president” is. Trump wants to be seen as the global strongman. He can show his strength both against China and muscovy by imposing a lower cap on the price of muscovy’s oil and make sure that no country pays more.
On his first day in office, Trump can announce that he will impose heavy US sanctions on any company that pays more than $15 per barrel for Russian oil (and on anyone who participates in any transaction above that level). Any country that is deemed not to be fully cooperative with this policy should expect to face punitive tariffs.
Combining this with tighter export controls could choke muscovy. It will also send a signal to Beijing that it is costly to help muscovy. This signal can be even stronger if Trump and the EU would impose export controls for shipments to China should they continue to export critical components. Some secondary sanctions are already in place but those can be significantly tightened. China grew rich by opening up for trade and FDI from the West. Threats of not only tariffs but also export controls and other measures would make Xi Jinping hesitant to continue to prop up the kremlin.
And a carrot
But donkeys also needs carrots to move. The territories north of China’s current border with muscovy constitutes a large carrot which China has had its eyes on ever since muscovy colonised them in the Amur Annexation when China was weak. It happened during the period 1839-1949 which Chinese denote as “hundred years of humiliation”.
muscovy has not succeeded in developing this and other parts of what it known as Russian Far East. After muscovy launched its war against Ukraine in 2014, western sanctions have crippled muscovy’s investments in the region. China has stepped in and have invested and developed cities and villages in the region. Lots of Chinese labour have moved in to work in Chinese owned firms and farms. The Bolshoy Ussuriysky Island that was shared between the two countries in an agreement in 2008 is a case in point. The Chinese part of the island now attracts half a million of tourists every year while the muscovy part of island is more or less deserted and looks like the usual muscovy shithole disguised as a settlement.
Apparently, China regards muscovy’s absence on its half of the island as an invitation to claim the whole island. In August last year China denoted the whole island as Chinese in its Ministry of Natural Resources’ 2023 edition of the "National Map of China". And that was not all. In the map, China renamed eight cities, including Khabarovsk and Vladivostok on the muscovy side of the border. They now officially have the old Chinese names, Boli and Hǎishēnwǎi.
The little internationally wanted war criminal and illegitimate “president” has order most of his troops to leave the for Ukraine, leaving it open for reannexation by China. Apparently, the little fascist in chief in the kremlin, thinks he can trust Xi Jinping. His trust can be used by the West.
Trump likes to make deals. Here’s a deal Trump can make. If China stops supporting muscovy and leaves Taiwan in peace, Trump can turn a blind eye to a Chinese occupation of its former territories. If Xi Jinping lets Trump build a tower carrying his name in in Boli or Hǎishēnwǎi, the deal would be even sweater.