China’s communist leadership is pursuing opportunities to increase imports of Russian coal, oil, and gas amid the ongoing war in Ukraine. Experts say the move could help stabilize China’s continuing energy woes, but could also backfire by drawing international sanctions on itself.
With Western countries weighing stricter sanctions on Russian energy exports in the months ahead, the question of how Beijing may react to the international ire against Russia is on many minds. It was a topic of discussion for a roundtable of foreign policy experts on July 8 at an event hosted by the Atlantic Council, a foreign-policy-oriented think tank.
With Russia becoming China’s top crude oil provider, energy ties between the two countries remain complex, as Beijing’s state-owned energy companies have also suspended some energy projects in Russia. Still, given the apparent trade benefits from Russia’s continued isolation on the world stage, some wonder whether the Chinese Communist Party (CCP) might desire to prolong the situation.
Danger and Opportunity Await China in Russia
Among the speakers at the Atlantic Council event was Erica Downs, senior research scholar for the Center on Global Energy Policy at Columbia University.
“Russia is one of China’s most important energy partners,” Downs said.
She explained that China was the largest importer of Russian coal, natural gas, and oil, and had increased its intake over the last year despite Russia’s invasion of Ukraine.
Indeed, the communist regime doubled its liquefied natural gas imports from Russia in February over a year earlier, increasing its imports of Russian oil even as demand fell. As early as November of 2021, China accounted for almost half of all global crude oil imports from Russia, and that trend does not show signs of slowing.
Downs said that China’s motivation was multifaceted. On one hand, the CCP was capitalizing on lower prices due to the lack of a market elsewhere in the world, she said, while on the other, the regime was desperately trying to improve its energy security following historic rolling blackouts last year that forced the regime to close factories for lack of power.
Notably, Downs also said that the land-based pipelines coming into China from Russia circumvented maritime chokepoints that could be targeted in the event China was sanctioned by the international community.
The war in Ukraine “certainly offers an opportunity to China, as well as presents a little bit of danger,” Downs said.
“It’s allowed China to buy a lot of Russian fossil fuels on the cheap.”
Downs noted that the war also provided the CCP with the advantage of being able to negotiate its ties with Russia from a position of strength, given Russia’s inability to successfully engage the market elsewhere. Still, she said, Chinese companies remain skittish about running afoul of international sanctions despite the CCP’s rhetoric questioning the legitimacy of the sanctions.
Seismic Impact Coming for Global Energy Market
Though China’s communist rulership appeared ready to evade the hardships of last year’s energy scarcity, some believed the worst was yet to come for the global community.
“Russia’s mass attack on Ukraine is a major geopolitical event, obviously, but it will have a seismic impact on the global oil and gas economy,” said Edward Chow, senior associate for the Energy Security and Climate Change Program at the Center for Strategic and International Studies, a security-focused think tank.
“It’s a little early to be completely sure about what the long-term impact will be. My feeling is that this may be bigger than the two price shocks of the 1970s.”
Chow’s remarks referenced the five-month oil embargo on the West led by Saudi Arabia beginning in 1973. That embargo, though brief, had devastating consequences on the American oil supply, quadrupling U.S. gas prices and driving shortages across the nation. The problems started by that crisis then fed into the oil shock of 1979, when markets overreacted to the loss of oil production from Iran, driving increased prices and shortages which ultimately sparked a long-term global recession.
“This will play out over a long period of time,” he said.
Given that long time frame, Chow said the complexity of China and Russia’s relationship would have the opportunity to evolve—or fracture—in interesting ways, particularly given China’s formerly close ties with Ukraine.
Before Russia invaded its neighbor, China had signed a treaty vowing to protect Ukraine from aggression by nuclear powers. The regime even purchased its first aircraft carrier from Ukraine in 1998.
“China was Ukraine’s largest trading partner,” Chow said. “Chinese trade with Ukraine was greater than German trade with Ukraine, greater than Polish trade with Ukraine.”
“The war will only make it a lot more complicated going forward.”
The Growing Shadow of Sino-Russian Authoritarianism
American intelligence leaders have repeatedly said the partnership between the CCP and the Kremlin will only continue to grow in the coming decade. Though there may have been some doubts following the announcement of a “no limits” partnership between the two regimes during an in-person meeting of Xi and Putin in February, the commitment of either party to the other has thus far proved unshakable. Indeed, that statement and the unlimited nature of the partnership were again reaffirmed in April.
Beyond that, the CCP allegedly was briefed about Putin’s invasion plans ahead of time and requested that the war in Ukraine be postponed until the conclusion of the 2022 Beijing Olympics. The Biden administration went so far as to engage in hours-long talks with CCP officials over the latter’s consideration to provide military support to Russia’s war effort. Additionally, a report from Ukraine, likely compiled by a friendly Western nation, claimed that China-based hackers conducted a massive cyber campaign against critical Ukrainian civilian and military infrastructure—including attacks on nuclear assets—the day before Russia’s invasion.
NATO member nations have called on China to rebuff Russia and refrain from supporting its war effort, though it is unclear to what extent the West is willing to pressure Beijing on its economic ties to Moscow amid increased global tensions.
https://www.theepochtimes.com/russian-energy-a-dangerous-opportunity-for-china-amid-ukraine-war-experts_4585858.html, The Epoch Times