Putin, Hat in Hand, Arrives in China To Celebrate 75 Years of Communist Ties — and Keep Military Aid Flowing

The world press will focus today on photos from Beijing of Vladimir Putin and Xi Jinping toasting the 75th anniversary of diplomatic relations between Communist China and the Soviet Union. However, behind the state dinner glitz, financial mandarins from both countries are expected to burn the midnight oil, devising secret strategies to maintain China’s exports of dual use materials to support Russia’s invasion of Ukraine.To preserve trade relations with its two largest trading partners — Europe and America — China’s government pursues a “strategic saddle” policy on Ukraine. The Chinese state press has largely dropped the “no limits” label on the Russia-China relationship. China does not provide direct military aid to Russia. However, according to a new study of Chinese customs figures, Beijing supplies 89 percent of all “high-priority” imports necessary for Russian weapons production.“High priority items refer to fifty dual-use products that are essential for manufacturing weaponry like missiles, drones, and tanks,” Carnegie China research analyst Nathaniel Sher writes in the study, released 10 days ago. “Providing Russia with dual-use components rather than finished weapons has allowed China to provide support for Russia while claiming plausible deniability.”Only three weeks ago, Secretary Blinken was in Beijing meeting with Mr. Xi and China’s top diplomat, Wang Yi. “I reiterated our serious concern about the PRC providing components that are powering Russia’s brutal war of aggression against Ukraine,” Mr. Blinken told reporters in Beijing. “When it comes to Russia’s defense industrial base, the primary contributor in this moment is China.” Presidents Xi and Putin toast during their dinner at the Palace of the Facets, a building in the Kremlin, March 21, 2023. Pavel Byrkin, Sputnik, Kremlin pool via AP“China can’t have it both ways,” the secretary told the Chinese. “You want to have positive, friendly relations with countries in Europe, and at the same time, you are fueling the biggest threat to European security since the end of the Cold War.”Today at Beijing, no cracks were visible in the relationship between the two massive neighbors. Mr. Xi told his Russian counterpart that the “China-Russia relationship today is hard-earned, and the two sides need to cherish and nurture it.” He added that China “is willing” to “jointly achieve the development and rejuvenation of our respective countries.”̀After the last Putin-Xi summit, in March 2023 in Moscow, Russian imports of Chinese dual-use goods spiked. Washington reportedly has drawn up sanctions against Chinese banks that handle the dual use trade. Earlier in April, Treasury Secretary Yellen traveled to Beijing with the same threat.Months of complaints and threats by Washington and Brussels seem to have had some effect. In March, Chinese dual use exports to Russia were around $300 million — about half the peak of over $600 million in December. Overall, Chinese exports to Russia dropped by 15.7 percent in March and by 13.5 percent in April, compared to the same periods last year. Some major Chinese banks have stopped taking payments from Russia.With Russia waging Europes’ largest war since World War II, China’s leader is increasingly touchy about charges that he helps Russia’s war effort. On a visit to Paris 10 days ago, Mr. Xi rejected criticism, saying: “We oppose the crisis being used to cast responsibility on a third country, sully its image, and incite a new Cold War.” Standing next to President Macron, Mr. Xi minimized China’s role in Ukraine, saying it was “not at the origin of this crisis, nor a party to it, nor a participant.”Yet Russia, hemmed in by Western sanctions, was thrown an economic lifeline by China. In 2023 two-way trade hit a record $240 billion — up 63 percent from 2021. By contrast, China’s trade with the European Union was nearly $800 billion and with America about $660 billion. About 95 percent of Russia-China trade now is conducted in rubles or yuan. With this jump in trade, Communist China now accounts for 33 percent of Russia’s foreign trade. By contrast, Russia accounts for 4 percent of China’s foreign trade. Holding a whip handle, China drives hard bargains. Reuters calculates that China saved $6 billion last year by buying Russian oil at a discount. China also pays less for Russian gas than Europe. Russia now is the largest supplier of oil, gas, and coal to China. With the departure of Western companies from Russia, Chinese companies now have half of Russia’s new car market, accounting for the top six foreign brands. To keep supplying Russia’s war machine with dual use parts, China is expected to channel sales through small regional banks that are hard to reach through sanctions. Other measures could include using middlemen or suppressing data from China Customs.With an eye on Taiwan, Beijing does not want Russia to lose in Ukraine. Mr. Putin’s visit comes just ahead of Monday’s inauguration of William Lai as the next president of Free China. Beijing claims the island democracy as its own territory.Beholden to China politically and economically, Mr. Putin travels to Beijing almost like the leader of a vassal state. The visit is Mr. Putin’s first foreign trip since being inaugurated a week ago for a six-year term. “It was the unprecedentedly high level of the strategic partnership between our countries that determined my choice of China as the first state that I would visit after officially taking office as president of the Russian Federation,” he said. Mr. Putin, now 71, has met Mr. Xi, now 70, 43 times since the latter became President of China in 2013.While Russia is arguably China’s only ally outside of Asia, China checks all the boxes to be a friend of Russia, argues Carnegie Russia-China analyst Alexander Gabuev.“War has become the organizing principle of Putin’s foreign policy,” Mr. Gabuev wrote on X. “He now assesses every relationship through a lens of three considerations: whether this relationship can help on the battlefield in Ukraine; whether it can help to sustain Russia’s economy and circumvent sanctions, whether it can help Moscow push back against the West and punish the United States and its allies for supporting Kyiv.”While the Russian and Chinese presidents prepared Thursday for the gala evening celebrating Sino-Soviet friendship, President Zelensky canceled an official visit to Spain and Portugal. Instead, he traveled today to Kharkiv to deal with a second front created by hundreds of Russian troops crossing the border near Ukraine’s second-largest city. Since Friday, Russians have seized about 45 square miles, provoking the flight of about 8,000 people to the relative safety of Kharkiv.“Our warriors are destroying the occupier who is trying to advance. It is all quite tense,” Mr. Zelensky said Tuesday evening in his nightly TV address. Earlier in the day, Secretary Blinken, on a visit to Kyiv, seemed to signal a change in policy by giving the green light to Ukraine to use American weapons to strike targets on Russian territory. Speaking next to the Ukrainian foreign minister, Dmytro Kuleba, he said: “We have not encouraged or enabled strikes outside of Ukraine, but ultimately Ukraine needs to make decisions for itself on how it conducts this war.”

Putin, Hat in Hand, Arrives in China To Celebrate 75 Years of Communist Ties — and Keep Military Aid Flowing

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