China Is Studying Russia’s Economic Playbook for Conflict

Foreign Policy, 14.04.2023
Eugene Chausovsky, a senior analyst at the Newlines Institute
Moscow’s efforts to deflect Western intervention may be applied to Taiwan

As tensions flare between China and the United States over Taiwan, most recently over Taiwanese President Tsai Ing-wen’s meeting with U.S. House Speaker Kevin McCarthy in California on April 5, there are growing concerns about the potential for conflict. Such fears have been elevated by Russia’s full-scale invasion of Ukraine in the face of U.S. opposition, a war that Beijing has been closely observing for its own purposes. Like Russia in Ukraine, China sees the United States as the chief force stopping it getting what it wants on this issue.

There have been countless studies over the lessons that Beijing could draw from the Ukraine conflict and apply to its own potential military intervention in Taiwan. But instead of focusing solely on the military dimension of Russia’s war in Ukraine, there is a more subtle—and perhaps more important—element of Moscow’s strategy in the conflict that China could be adapting in its efforts to absorb Taiwan. This element concerns the use of selective economic and diplomatic statecraft to counter any U.S.-led resistance, and Beijing is wasting no time in applying such lessons from the war in Ukraine to build up its own leverage over Taiwan.

Russia’s invasion of Ukraine has demonstrated two particularly relevant facets of U.S. strategy. The first is U.S. support of Ukraine, primarily in the form of military backing via weapons shipments and logistical assistance, as well as in broader political and economic terms. Such support has been maintained over the course of the prolonged conflict, with the United States and its NATO allies sustaining and even increasing various forms of aid for Ukraine over the past year. This has served to slow down and even reverse some of Russia’s territorial gains, while proving to Moscow that Western solidarity with Ukraine is not easily broken.

Chinese President Xi Jinping has to take into account the potential for U.S. military support for Taiwan in aiding Taiwanese resistance in the event that Beijing tries to take the island by military means. But the Chinese government also has to take into account the potential military, economic, and diplomatic support to Taiwan from other countries allied with the United States, including regional allies such as Japan and Australia.

A protracted conflict would be a nightmare for China, not least because seizing an island is more of an all-or-nothing deal than a land invasion. Indeed, Taiwanese officials have themselves drawn this connection, with Taiwanese Defense Minister Chiu Kuo-cheng stating that “the Russia-Ukraine war has brought great lessons” for the Chinese, who “will definitely seek speed.”

But the second element of U.S. strategy—the attempted isolation of Russia from the international system, especially economically—has been much more complicated and less successful. While the United States and European Union have passed sanctions against Russia and have diversified away from Russian energy imports, most non-Western countries have not followed suit. Indeed, countries like China, India, the Gulf states, and even NATO member Turkey have increased economic and especially energy ties with Russia since the conflict began early last year. This has enabled the Kremlin to prevent an economic or political collapse and to sustain its war effort in Ukraine, while avoiding the type of global isolation and repudiation of Russia that the United States and its allies were hoping to achieve.

Russia’s economic pivot did not come suddenly. Indeed, Moscow began concertedly expanding its economic and diplomatic ties eastward nearly a decade ago, dating back to its initial foray into Ukraine in the beginning of 2014. That was the true start of the Ukrainian conflict, in which Russia responded to the ouster of a pro-Moscow government in Kyiv in the Euromaidan revolution with its annexation of Crimea and support of a separatist rebellion in Eastern Ukraine.

Following these events and the subsequent diplomatic fallout between Moscow and the West, Russia ramped up its economic engagement with China, expanding ties in the energy sphere and launching the massive Power of Siberia pipeline to send natural gas exports eastward. Russia intervened militarily in the Syrian civil war on behalf of the Assad regime, which placed Moscow at the seat of many diplomatic tables in the Middle East. Russia expanded security ties with states across Africa and Latin America, opportunistically building relationships with governments outside of the pro-Western paradigm.

As a result of all this diplomatic, economic, and security legwork, Russia now finds itself much less isolated than the United States or West would like it to be, despite its full-scale invasion of Ukraine. While Moscow has few direct supporters of its Ukrainian war effort outside of states like Belarus and Iran, most countries outside the West are not willing to sacrifice their economic or security ties with Russia despite such calls from the United States, whatever their view may be on the Ukrainian conflict itself. Consequently, Moscow has greater room for maneuver on the Ukrainian front, despite its military setbacks and persistent pressure from the United States and its allies.

It is this part of Russia’s playbook on Ukraine that may prove particularly relevant for Beijing. Taking into account the constraints and blowback of an outright military invasion of Taiwan, China could instead seek to achieve its objectives related to Taiwan in more subtle ways, whether through direct economic pressure, maritime interdictions, or manipulating Taiwan’s supply chain via cargo inspections and port redirection. And while an outright military invasion of Taiwan could have tremendous costs for Beijing, Russia’s war in Ukraine has shown that this does not necessarily make such an action prohibitive.

In any such scenario, the Russian case has proven to China that it is useful to have a constellation of countries that would be at the very least neutral in the event of any type of intervention in Taiwan. And here, China has already laid much groundwork with its global economic and diplomatic outreach, encapsulated by its “Go Out” policy initiated near the turn of the century and the Belt and Road Initiative launched in 2013. Such efforts by China certainly had their own myriad economic and political motivations beyond the Taiwan issue, but Beijing has now seen from the Ukrainian conflict that they could have the added benefit of keeping many countries on the sidelines in the event of any type of a Taiwanese intervention. Even among Western countries, Beijing is probably happy at the aftermath of French President Emmanuel Macron’s visit to Beijing, in which he echoed Chinese talking points on Europe’s divergence from America.

In this context, it is notable how China has ramped up its economic and diplomatic ties with select non-Western states over the course of the past year. Take, for example, China’s recent mediation of the Saudi Arabia-Iran diplomatic agreement reached on March 10, which itself was preceded by months of Beijing’s diplomatic engagement with Riyadh and Tehran that included economic deals with both countries. China has also further expanded energy ties with Russia over the past year, with Xi holding a high-profile meeting with Putin last month to tout such ties.

It may be no coincidence that such countries are key energy providers to Taiwan, with Saudi Arabia serving as the island’s largest oil exporter and Russia serving as a major provider of coal and natural gas supplies. One measure that China could take is to leverage its relationships with these energy suppliers in order to pressure Taiwan, which is critically dependent on imports for 98 percent of its energy supply (and associated semiconductor production). In both cases, Beijing may be able to count on Moscow and Riyadh’s neutrality in the event of an intervention in Taiwan, or perhaps even their cooperation on efforts to redirect Taiwan-bound energy shipments through Chinese ports as a means to further constrain Taipei’s room for maneuver.

Whether or not China chooses to pursue the military option on Taiwan, Beijing is taking a page out of the Russian playbook to cultivate economic and diplomatic ties outside of the United States and its allies to better prepare itself for any scenario. Planning does not mean an invasion, or even a coercion attempt, is inevitable, and there are plenty of factors that may constrain Beijing from pulling the trigger. But Chinese diplomatic efforts may nevertheless offer hints about the course of any future moves against its neighbor.

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