China’s Russia Dilemma

Will China arm Russia?

“China sending Russia aid in the style of Soviet propaganda” (DALL-E 2)

Over the last two weeks the US government has alleged that China is “strongly considering” providing arms to Russia, one year into the war in Ukraine. Simultaneously, China last week put out a (highly vague) peace plan for the conflict, which was immediately dismissed by Washington. A number of people have asked me about both, so I figure I may as well briefly comment on how things stand, in my view.

First, to be clear about the situation, China has not yet actually sent Russia any arms or ammunition. This is a fact CIA Director Bill Burns acknowledged on Sunday, when he said in an interview that the US government was “confident” Beijing had been considering “the provision of lethal equipment,” but admitted that so far they’ve turned up no evidence of “actual shipments of lethal equipment.”

But the Biden administration is clearly very worried about the possibility, since they keep leaking intel to that effect to the press and issuing loud warnings to Beijing not to do it, calling the provision of arms a “red line” that would have “serious consequences” if crossed. “We will not hesitate to target Chinese companies or officials that violate our sanctions or otherwise engage in Russia’s war effort,” Secretary of State Antony Blinken said on Tuesday. Burns declared it “would be a very risky and unwise bet” for China.” This preemptive uproar appears to mostly be in response to reported intelligence that at least one Chinese company has been in negotiations to potentially produce military drones for the Russians.

China swears they have no such intention, however, and there are actually some reasons to believe them (for now). The fact is that China appears to be highly conflicted about how to approach the war, as they are trapped in a situation in which they have multiple, fundamentally conflicting interests at play.

There is no need to be naïve about this: China’s ultimate goal is to smash American/Western hegemonic power and initiate a Chinese Century – but how best to accomplish this? On the one hand, China’s likeminded friend Russia is now engaged in a military challenge to the American-led Western liberal global order, and if it can win decisively in Ukraine the credibility of that order will be badly, maybe even fatally, damaged. China would love to see that happen. On the other hand, the whole basis of Chinese national power is derived from the continued growth of its economic strength; and China’s economy is currently a mess, badly weakened by years of draconian zero-Covid stupidity, an ongoing real estate crisis, huge levels of debt, and communist political mismanagement. Meanwhile international companies are beginning to shift supply chains out of China as they read the room and see Cold War 2.0 dawning. Getting back on track economically is therefore the top priority of Chinese leadership for the foreseeable future, and keeping China’s largest trade partners from decoupling themselves economically is especially critical for Beijing. Which is why China is currently engaged in a big diplomatic “charm offensive,” deploying its top diplomats to fan out across the world and try to convince everyone to get back to doing business with it again as normal.

In addition to whatever sanctions the US might impose on China, arming Russia would completely destroy this diplomatic effort in Europe and deeply alienate much of the continent, which is China’s most important trade partner. In comparison, Chinese trade with Russia, an economy roughly the size of Italy, is miniscule. When US Deputy Secretary of the Treasury Wally Adeymeo recently threatened that the Chinese now “have a choice between doing business with the countries of our coalition, which represent 50% of the global economy, and doing business with Russia,” he was pretty accurate in pointing out China’s strategic predicament.

Nonetheless, the White House is panicking for a reason. Chinese material military support would absolutely be a game changer for Russia, and would likely swing the conflict decisively in its favor. As many have noted, this has become a war of attrition, with both sides running low on ammunition and equipment, as well as manpower. Russia has the advantage when it comes to manpower, but thanks to NATO’s backing Ukraine has a firm advantage in war materiel. I’ve noticed that some people don’t seem to appreciate the scope of this, perhaps imagining that Russia still has the manufacturing power of the USSR during the Cold War. It does not.

Take a look at the below chart, displaying the world’s top 20 arms manufacturing companies by total defense sales in 2018 (the most recent year for which I could find decent data, though not much has changed since except all these firms’ sales growing pretty much across the board). It should give you a pretty good picture of the material balance of this globalized conflict in one image: