China Is Starting to Really Regret Its Friendship With Russia

Photo Illustration by Erin O’Flynn/The Daily Beast/Getty“The biggest surprise for China was that Russia totally misjudged its own power. We thought that Russia would win a very fast war,” the Chinese expert explained ruefully, a few weeks after the invasion. This was not the official line, which was then in the phase of intense attempts to persuade global audiences that Beijing had no idea what was coming. But it was a better reflection of Chinese foreign policy thinking than either playing innocent or repeating ad nauseam that the invasion of Ukraine was the responsibility of the United States and NATO pushing a big power against the wall. One of the main reasons behind Beijing’s resistance to such entanglements in the past was not because partners and allies weren’t useful but because the countries in question risked dragging China down with their mistakes. The “Pakistan model,” which China had been touting, was conditioned by exactly this experience: Beijing didn’t want to get stuck defending every Pakistani intervention in Kashmir or inadvertently drawn into a conflict with India, so it confined itself to providing the capabilities its friend needed and then staying above the fray. Russia was not the first Chinese partner to believe it would win a very fast war and found itself in a hole, but China wasn’t usually pulled into it with them.The problem Beijing faced in 2022 was that in crucial areas, it was still too soon to make a break with the West. China remained dependent on the U.S. dollar system. For all the speculation about renminbi internationalization, Chinese payment systems, and its new digital currency, China was barely any closer to constructing a resilient alternative financial architecture than it had been in 2014. The technology story was equally problematic: despite the massive push to build its own semiconductor industry, Chinese firms were still painfully reliant on U.S. intellectual property. This left many of its companies exposed if they continued to do business in Russia, much like any other sanctioned entity. It was Huawei’s and ZTE’s sanctions-busting dealings in Iran that had risked decimating the two firms once the United States had the legal justification to go after them with full force. Now articles entitled “Is Russia the New Huawei?” were popping up, as the United States applied the same Foreign Direct Product Rule restrictions to the entire Russian tech sector that had been the final blow for Huawei’s 5G plans in the UK. Circumvent them, and those Chinese firms could kiss goodbye to their advanced semiconductors. The net effect was that from banks to telecoms, most of the companies that might have wished to take advantage of the newly opened vacuum in the Russian market instead faced even greater limitations on their activities.Read more at The Daily Beast.