Russia’s Isolation Spurs Rethink in China
As Moscow grapples with the swift effects of economic sanctions, Beijing looks toward self-sufficiency.
Welcome to Foreign Policy’s China Brief.
Welcome to Foreign Policy’s China Brief.
The highlights this week: Russia’s economic isolation raises concerns among Chinese officials, Chinese diplomat Zhao Lijian backs conspiracy theories about U.S. bioweapons in Ukraine, and Beijing sets its lowest GDP growth target for 25 years.
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Beijing Watches Moscow’s Economic Disaster
As the Russian economy goes up in flames, Beijing is wondering what Moscow’s increasing isolation means for its own future—and what it can take from the pyre without getting its hands burned.
One of the Chinese leadership’s chief concerns is food. Russia and Ukraine are both major wheat producers, and Chinese President Xi Jinping this week called for China to reduce its dependence on foreign agricultural markets, saying that the “the rice bowls of the Chinese people must be filled with Chinese grain.” This is a long-term concern for the Chinese Communist Party, which is acutely aware of the country’s history of famine and the embarrassment incurred by the communist world’s dependence on Western grain during the first Cold War.
China’s target for self-sufficiency is to produce 95 percent of grain consumed, but in the last few years that number has been just over 80 percent. Xi seems particularly concerned about the issue, repeatedly pushing for greater agricultural autarky. But one persistent problem is that the general public perceives food imports as higher-status and safer than domestic products. (Chinese bought record amounts from countries such as Japan during the pandemic.)
Navigating sanctions is another key concern for China. Several of the sanctions tools the United States has used against Russia, such as the Foreign Direct Product Rule and more aggressive use of the export control list, were sharpened in use against Huawei and other Chinese firms. That has helped make the sanctions against Russia devastatingly effective; it also provides models that Washington could use against Beijing on a larger scale in the future. Chinese media has emphasized the costs of sanctions for the West, rather than their effects on Russia.
To be sure, the volume of Chinese trade with democratic countries is much higher than Russia’s. A debate that will likely play out inside the Chinese political system is between those advocating greater autarky to weather potential contests with the United States and those who call for more entanglements to make it harder for the West to use such tools. Given the prevailing xenophobia in China, I suspect the first will win.
But for the moment, even as China tries to make the deals it can to grab Russian energy and wheat on the cheap, Chinese banks are nervous about crossing the sanctions line. They still need to be able to deal in U.S. dollars, after all. U.S. Secretary of Commerce Gina Raimondo has issued a clear redline to Chinese technology firms that might seek to supply Russia, warning that they will be cut off from the services and supplies they need to continue operating.
Such warnings will speed up existing plans to create systems that aren’t dependent on Western standards, such as the attempt to remove Microsoft Windows software from Chinese government computers. But these efforts have been ongoing since at least 1986, when China launched its 863 program to wean itself off dependence on foreign technology. The process has produced some domestic successes, but it has proved difficult in practice; the attempt to swap Windows for the Kylin operating system has been going since 2001, for example.
Yet all this should ring alarm bells for any Western firms judging risk in China. As Russia has dramatically shown in the last two weeks, supposedly unthinkable breaks with the rest of the world can happen very fast when geopolitics comes into play. And it becomes even more likely when domestic politics reward fervent nationalism instead of long-term thinking.
What We’re Following
China backs lab conspiracy theories. This week, Chinese Ministry of Foreign Affairs spokesperson Zhao Lijian fueled conspiracy theories about U.S. bioweapons in Ukraine. The claims originated in Chinese media in 2020 and have recently circulated among Russian, Chinese, and far-right U.S. media, as Justin Ling reported in Foreign Policy. Russian officials have also repeated the false stories, including Russian Foreign Minister Sergey Lavrov.
Although the conspiracy theories are an extreme example, Chinese media has been flooded with anti-Western content in the wake of Russia’s invasion of Ukraine, such as a Xinhua editorial blaming the United States for the conflict. Other antisemitic takes have emerged on the fringe; I recommend following Tuvia Gering, who is painstakingly documenting them. And yet mainstream news has also begun shifting away from a pro-Russia stance, putting out more neutral portrayals of the conflict while downplaying the war in favor of other news.
The basic principle here is simple: Chinese media outlets are interested in content that damages the West’s image but may not be particularly interested in helping Russia. In the early stages of the war, there might have been more enthusiasm for actively supporting Moscow, but that has drained away as the scale of strategic failure becomes clear. Anti-Westernism is simply the default mode for Chinese media in 2022.
Attacks on journalists. Chinese state media launched a series of vicious attacks against several sites that cover China, including SupChina and the China Africa Project. The attacks started with Lei Xiying, a blogger who says he runs his own think tank and is a good example of what I call a nationalist entrepreneur: someone who uses online hatemongering to promote their own career, with the material picked up by mainstream state media, such as the Global Times.
Such a campaign is ultimately self-defeating, not least because sites like SupChina lean toward the friendlier end of U.S. coverage of China. The attack on the China Africa Project accuses it of a “misinformation campaign” about so-called debt trap diplomacy, when the website is among the biggest opponents of the idea that it is a concern.
Unsurprisingly, the attacks have focused on Chinese journalists in the United States or journalists of Chinese descent. In some cases, police or online nationalists have threatened their families back in China.
Chained woman fury simmers. Despite the authorities’ best efforts, the story of a woman discovered chained up in Xuzhou remains fiercely discussed online. It’s hard to pinpoint exactly what makes this particular story so powerful; perhaps it’s the perceived government indifference and rural poverty, and a renewed focus on women’s rights. Phoebe Zhang suggests some reasons for the persistent anger in the South China Morning Post.
Tech and Business
Official growth target announced. Although overshadowed by the war in Ukraine, the Two Sessions, an annual political event used to announce major policies, are underway in Beijing. The meetings see almost no real debate; they are gatherings of the National People’s Congress and of a political advisory group that lacks formal power. Especially now, both groups essentially exist to sign off on party decisions, although there is sometimes interesting discussion on fringe issues.
The biggest policy announcement at the Two Sessions came in Premier Li Keqiang’s address to the National People’s Congress, in which he announced an official growth target of 5.5 percent for the year—the lowest for over 25 years. That represents significant uncertainty, but it may also be overly ambitious: The Chinese economy is struggling with the impact of a still-unspooling property and debt crisis. Real estate firms are still struggling to survive.
Russia looks to Chinese payments. Several Russian banks, about to be cut off from Western payment services such as Visa and Mastercard, have looked for a deal with UnionPay, the main Chinese payment service. The arrangement isn’t finalized, but it could allow Russians to access their accounts globally with more ease; UnionPay works on most Western ATMs. The shift may also represent the mid-term future for Russia as it attempts to integrate further into Chinese services. But that may not be what the Russian middle and upper classes want.
Another side effect of the war in Ukraine was a sudden spike in nickel prices, causing one major Chinese investor to face an unexpected crisis after he shorted nickel, with potential losses of as much as $8 billion. As of writing, his firm had secured credit through Western banks.
Japan stirs the pot. Speaking in parliament this week, Japanese Prime Minister Fumio Kishida referred to the Southern Kuril Islands, seized by Russia at the end of World War II, as Japan’s “sovereign territory.” Although that has been the official Japanese position for some time, Tokyo has avoided using that language while diplomacy with Russia continued.
With Japan an enthusiastic participant in sanctioning Russia, Japanese-Chinese relations and business may become a target in Beijing. China is opposed to what it calls attempts to reverse the verdict of World War II when it comes to Japanese territorial claims—and Japan is a perennial target of Chinese boycotts.
James Palmer is a deputy editor at Foreign Policy. Twitter: @BeijingPalmer
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