The Russia-Ukraine war makes problems for China’s trade development policies in Eurasia. Moreover, the dream of China’s belt and road initiative faces issues. The tension in Eastern Europe and Eurasia is against China’s trade-economic interests. Beijing officials are now thinking of the destruction of their long-held trade ambitions. Thus China’s economic dream seems to be reaching a dead end. Who is responsible? Russia or the West?
China’s Belt and Road Initiative
Belt and Road Initiative (BRI) is a transcontinental long-term policy and investment program. It aims at infrastructure development and acceleration of the economic integration of countries along the route of the Silk Road. China’s President Xi Jinping unveiled the Initiative in 2013. Until 2016, they called it OBOR – One Belt One Road.
BRI aims to “promote the connectivity of Asian, European and African continents and their adjacent seas. Currently, 71 countries are taking part in the Initiative. This represents more than a third of the world’s GDP and two-thirds of the world’s population.
According to Council on Foreign Relations, it significantly expands China’s economic and political influence. President Xi announced the Initiative during official visits to Kazakhstan and Indonesia in 2013. The plan is two-pronged: the overland Silk Road Economic Belt and the Maritime Silk Road.
Ukraine and China’s Belt and Road Initiative
According to Council on Foreign Relations, Ukraine joined BRI in 2017, seeking to leverage its relationship with China. Ukraine aimed to accelerate its transport modernization, especially for railways and roads. Ukrainian policymakers have also sought to make the country a gateway for China’s access to Europe. The two countries have so far signed BRI -related construction contracts worth nearly $3 billion. The contracts include sectors such as transportation and energy.
China’s Eurasian Railway Dreams
As it says in Foreign Policy, Putin’s War Has Killed China’s Eurasian Railway Dreams. The iron silk road was crucial for the Belt and Road Initiative. Polish President Andrzej Duda talked to Chinese President Xi Jinping about the vision of transforming Poland into China’s “gateway to Europe.” When Duda attended Beijing’s Great Hall of the People on February 6 for the Olympics, the talk took place. Both presidents were optimistic about transforming Poland into a logistic hub along the China-European Union supply chain.
Poland is home to train routes connecting China to Europe along the New Eurasian Land Bridge. This railway corridor crosses Eurasia —running through Kazakhstan, Russia, and Belarus. But almost half of those routes pass through Russia. Thus European sanctions following Russia’s invasion of Ukraine could massively impact the ways.
Economic interests of China in Ukraine
China has primary economic interests in Ukraine. As it says in Council on Foreign Relations, By 2019, China became the top importer of Ukrainian barley and iron ore. Moreover, Ukraine overtook the United States as China’s largest corn supplier. Ukraine is also a major arms supplier for China, second only to Russia. Ukraine’s free trade agreement with the European Union makes it an attractive transit point for Chinese goods. Infrastructure and energy have also been significant points of emphasis. For example, in 2016, China’s COFCO Group built a $75 million grain and oil transfer terminal at the Mykolaiv port. In 2017, Chinese engineers upgraded Ukraine’s busiest international port, the Yuzhny port. Ukraine has also become an important market for Huawei, the Chinese telecommunications giant.
Impact of Russia-Ukraine war on China’s food prices
According to CNBC, China emphasizes its food production and security. It helps mitigate the impact of the Russia-Ukraine war on domestic food prices, analysts said. Notably, China is the world’s second-largest consumer of corn. However, only 9.4% of its domestic corn consumption in 2021 came from imports. Moreover, only 5.9% of China’s wheat consumption last year came from imports. China’s heavy reliance on domestically produced wheat and corn does not mean the country is immune to price increases. According to Chinese media reports, imported wheat and corn prices have surged.
China’s stance against the Russia-Ukraine war
According to Reuters, the Russian attacks are causing pan-European sentiment against China. The flow of goods along the “Iron Silk Road” is likely to slow. The diplomatic and commercial damage will be hard to repair. On March 1, Chinese Foreign Minister Wang Yi spoke with Ukrainian Foreign Minister Dmytro Kuleba. He told Kuleba that China has always advocated respect for all countries’ sovereignty and territorial integrity. Moreover, he added that expanding military blocs cannot bring regional security. This shows that china agrees with Russia’s objections to Ukraine joining NATO.
According to Council on Foreign Relations, China’s response to the war in Ukraine is likely to be limited to evacuating Chinese citizens, suspending ongoing projects, and eventually having Chinese companies absorb the loss of assets. China has sought to maintain its neutrality between two essential trade partners regarding the conflict between Russia and Ukraine.
According to the Guardian, China has signalled its willingness to play a mediator role in the Russia-Ukraine war. China’s foreign minister, Wang Yi, told his Ukrainian counterpart, Dmytro Kuleba, that Beijing “laments” the outbreak of the conflict. According to a Chinese readout, he added that he is “extremely concerned” about the harm to civilians. However, China severely opposes sanctions against Russia. It said dialogue “is the only way to stop the fighting”.
Threat to China’s economy: Russia or the West?
According to Reuters, Russia is destroying what China is trying to build. Beijing has refused to condemn President Vladimir Putin’s invasion of Ukraine and has suppressed domestic criticism of Russia. China is constructing trade, investment and technology relationships with many eastern European countries under its ambitious BRI. However, the Russia-Ukraine war threatens its ties with these countries and its trade and development.
Undoubtedly the war is a threat to China’s economy at the international level. The US and its NATO allies are the leading causes of the war. As it says in WION, the tensions between Russia and Ukraine go years back. However, tensions increased in 2021 when Ukrainian President Volodymyr Zelensky urged US President Joe Biden to let Ukraine join NATO. Russia demanded an end to NATO’s eastward expansion.
To sum up, The US is planning to expand NATO. This can be a significant threat to the security of the region. Thus the US is responsible for the economic and military catastrophes in China, Ukraine, Russia and the BRI.
