Tracking China's Evolving Position on the Ukraine Crisis
Welcome to The India China Newsletter.
This issue will focus on China's early - and evolving - position on the Ukraine crisis and Russia's invasion. It will focus solely on the series of official statements from different officials in China from February 19 until February 25, 2022, which I thought would be interesting to look at in of themselves. The views of a couple of Chinese commentators follows. For those interested in a further deep dive, there are links to all the original statements in full that are discussed here. (They are all in English.) This issue runs into 6,000 words, so you may wish to click the headline to read on your browser.
Before coming to those statements, a few observations. On Friday, February 25, both China and India abstained on the UN Security Council resolution. It should be noted here that the Indian and Chinese positions -- and the messages conveyed by Prime Minister Modi and President Xi in their phone calls with Putin -- were very, very similar. In fact, almost identical.
- An end to the violence
- A return to the diplomatic track
Both don't want:
- To publicly criticise Putin
- Their positions to aggravate their relations with the West
This explains, in a nutshell, their abstaining, and also why China was never going to veto the resolution, although some analysts in the West, in my view, perhaps wrongly over-interpreted their decision to not veto as reflecting some kind of new displeasure or even a change in approach to their relations with Russia.
One lingering question over China's position: Did Xi, and Beijing, know about Russia's plans to invade?
The Wall Street Journal reports today that Beijing didn't and was caught unawares:
Beijing has been flailing to adjust its position on the Ukraine situation ever since Mr. Xi signed on to an extraordinary solidarity statement with Mr. Putin early this month, a decision influenced by a Chinese foreign-policy establishment stuck in a belief that Mr. Putin wasn’t out for war...
For weeks, China’s foreign-policy establishment dismissed a steady stream of warnings from the U.S. and its European allies about a pending Russian invasion, and instead blamed Washington for hyping the Russian threats. Now, China is trying to regain its balance after making a calculation that could seriously undermine a position it has tried to build for itself as a global leader and advocate for developing nations. As late as this week, with signs looming of an impending invasion, when a well-connected foreign-policy scholar in China gave a talk to a group of worried Chinese investors and analysts, he titled the speech “A War That Won’t Happen.”
The New York Times had this interesting report yesterday:
Over three months, senior Biden administration officials held half a dozen urgent meetings with top Chinese officials in which the Americans presented intelligence showing Russia’s troop buildup around Ukraine and beseeched the Chinese to tell Russia not to invade, according to U.S. officials.
Each time, the Chinese officials, including the foreign minister and the ambassador to the United States, rebuffed the Americans, saying they did not think an invasion was in the works. After one diplomatic exchange in December, U.S. officials got intelligence showing Beijing had shared the information with Moscow, telling the Russians that the United States was trying to sow discord — and that China would not try to impede Russian plans and actions, the officials said.
Comment: There are essentially three arguments for why China may have been caught unawares, as the WSJ reported, which are:
1) Beijing's many public statements, as we will see below, mocking US intel
2) Beijing didn't evacuate its citizens
3) Some Chinese analysts confidently asserted it won't happen (I’ll add that there were some others, however, who said it would)
We may never know with certainty what Beijing knew -- and what Putin told Xi during their meeting in Beijing in early February -- but in my view, all three arguments don't conclusively answer the question either way.
I think it is plausible Xi may have asked Putin to not take any disruptive action until the Winter Olympics concluded on Feb 20 (which Putin appeared to do, and he literally began rolling out his steps the day after the Olympics ended). I think it is also plausible that the 'action' China may have thought was coming was perhaps limited to the two breakaway regions and not a complete bombardment of Ukraine.
As the New York Times piece reported, China certainly knew about the U.S. intel. As for the question of why China's foreign ministry would publicly deride US claims -- just as the Russians did -- even if they knew some action was coming, as we shall see in the evolution of statements below, doing so didn’t prove to be too much of an obstacle in subsequently pivoting the narrative to blame NATO - and the US in particular - for fuelling tensions. In fact, the initial focus on blaming the US for stirring up tensions and disinformation made for an easy pivot.
Let me be clear: the point I'm making is we may never be able to answer the question of whether Beijing knew with certainty. I would, however, caution against assuming this is a clear cut case of Beijing being taken completely by surprise by the actions of its ally. My two cents before moving on to the official statements: I remain a bit skeptical about that black-and-white narrative, which, I'd also note, suits Beijing as it is sensitive about being seen as colluding completely with Russia.
On February 19, China's Foreign Minister Wang Yi laid out the broad contours of Beijing's position at the Munich security conference. The official readout of his remarks is here.
It made three broad points that have continued to remain the pillars of Beijing's messaging in the week since (it's hard to believe it's only been a week).
1. Blaming NATO (this is the only point of difference in what China and India are saying, the rest is pretty much on the same page)
Wang Yi noted that since the Cold War is long gone, NATO, a product of the Cold War, needs to adapt itself to the changing circumstances. If NATO keeps expanding eastward, will this be conducive to peace and stability in Europe, and will this contribute to long-term stability in Europe? This is a question that merits serious consideration by European friends.
2. Importance of sovereignty (China has actually had more to say on this than India)
Wang Yi stressed that the sovereignty, independence and territorial integrity of all countries should be respected and safeguarded. This is a basic norm of international relations that embodies the purposes of the UN Charter. It is also the consistent, principled position of China. And that applies equally to Ukraine. If anyone questions China’s attitude on this matter, it is ill-intended sensationalization and a distortion of China’s position.
3. Diplomacy as the way forward
Wang Yi stated that China, as a permanent member of the UN Security Council, has always decided on its position and approached international affairs based on the merits of issues. On the Ukrainian issue, China believes that it is imperative to return to the Minsk II agreement, the starting point of this matter, as quickly as possible. The agreement is a binding instrument negotiated by the parties concerned and endorsed by the UN Security Council, and provides the only viable way out. State Councilor Wang noted that to his knowledge, Russia and the EU both support Minsk II, and in his recent telephone call with US Secretary of State Tony Blinken, the US side also expressed its support. In this context, shouldn’t the relevant parties sit down together for a thorough discussion to work out a roadmap and timetable for the implementation of the agreement? What all parties need to do now is to earnestly shoulder responsibilities and work for peace, instead of increasing tensions, stoking panic, or hyping up war.
In the days before his remarks, the Foreign Ministry pooh-poohed any notion of an imminent attack.
On February 16, spokesperson Wang Wenbin accused the US of "disinformation":
RIA Novosti: Russian Defense Ministry said on Tuesday that the country was moving some forces away from the border with Ukraine and from Crimea following military drills. The move comes after days of Western media competing to predict the date of an alleged Russian invasion of Ukraine. Does China see signs of military aggression from the Russian side, or does Beijing trust Moscow’s claims that troops were sent to regions near the border with Ukraine only for military drills? How does China see the current development of the situation around Ukraine?
Wang Wenbin: For days, the US has been playing up the threat of war and creating an air of tension. This has gravely impacted the economy, social stability and people’s lives in Ukraine, and added obstacles to advancing dialogue and negotiation between parties concerned. I noted that the Russian side recently said that the West has resorted to “information terrorism” on the Ukraine issue, and that February 15, 2022 will go down in history as the day of the failure of Western propaganda. We must point out that it is exactly the persistent hyping and dissemination of disinformation by some in the US and the West that has added more turbulence and uncertainty to the world already fraught with challenges and intensified distrust and division. We hope relevant parties can stop such disinformation campaign and do more things that benefit peace, mutual trust and cooperation.
Wang repeated this the following day:
Disseminating disinformation and creating an air of tension is not conducive to resolving the Ukraine issue. Clamoring for bloc confrontation and wielding the big stick of sanctions will only impede dialogue and negotiation. The US side should value and accommodate Russia’s legitimate and reasonable concerns over security guarantees and play a constructive role for all parties to seek a political settlement to the Ukraine issue on the basis of the Minsk-2 agreement, rather than hype up and sensationalize the crisis and escalate tensions. China supports all efforts in keeping with the direction and spirit of the Minsk-2 agreement.
The following day, February 18, Wang again hit out at the US intelligence community, for the third straight day. He said:
CCTV: On February 17, US Secretary of State Antony Blinken said at the UN Security Council that US information indicates that Russia “takes steps down the path to war” and is “preparing to launch an attack against Ukraine in the coming days”. By sharing the intelligence, he added, the US aims “not to start a war, but to prevent one”. Does China have any comment?
Wang Wenbin: The credibility of the US intelligence community has been tested on many occasions, including Iraq and Ukraine. I would like to stress once again that in seeking a political resolution of the Ukraine issue, nobody should put up a smokescreen of war and use it as leverage, or threaten others with sanctions and pressure, still less resort to the means of inciting bloc confrontation. Efforts should be made on the basis of the Minsk-2 agreement to properly treat the reasonable security concerns of all sides including Russia through dialogue and negotiation, and work for the full resolution of the Ukraine crisis and related issues.
Foreign Minister Wang Yi's speech at the Munich conference followed on February 19. The Winter Olympics closing ceremony was attended by President Xi on February 20. The following day, Putin sprang into action, recognising the two "republics". On the morning of February 24, Putin announced his invasion in his somewhat rambling speech and the all-out attack began.
On February 23, the Foreign Ministry again hit out at the US for 'hyping up' the threat of warfare. Is it possible that Beijing thought Putin was going to limit himself to actions in the two breakaway "republics"?
Here is what spokesperson Hua Chunying said:
CCTV: On Ukraine, what role has China played in seeking a resolution to the Ukraine issue?
Hua Chunying: On regional hotspot issues, China is always committed to promoting peace and negotiation and playing a constructive role in seeking a peaceful resolution of these issues. On the Ukraine issue, lately the US has been sending weapons to Ukraine, heightening tensions, creating panic and even hyping up the possibility of warfare. In stark contrast, China has all along called on all parties to respect and attach importance to each other’s legitimate security concerns, strive to resolve issues through negotiation and consultation, and jointly safeguard regional peace and stability.... A key question here is what role the US, the culprit of current tensions surrounding Ukraine, has played. If someone keeps pouring oil on the flame while accusing others of not doing their best to put out the fire, such kind of behavior is clearly irresponsible and immoral.
Then came the invasion, on February 24. Here's how the Foreign Ministry responded, and pointedly -- just like India -- did not call it an 'invasion'. As you can see below, the exchanges got quite heated. Hua Chunying’s comment on NATO still owing the Chinese people “a debt of blood”, referring to the embassy bombing in 1999, went viral on Chinese social media.
This is quite long, but I thought it was interesting enough to include in some detail:
AFP: China has consistently refrained from condemning Russia’s aggression toward Ukraine. Now that President Putin has begun an invasion. Will China finally condemn Russia’s actions?
Hua Chunying: China is closely monitoring the latest developments. We call on all sides to exercise restraint and prevent the situation from getting out of control.
Bloomberg: Can you say then China considers Russia’s action an invasion? Is it an invasion? Is it a violation of the UN Charter?
Hua Chunying: We have stated China’s principled position on the Ukraine issue. There is a complex historical background and context on this issue. The current situation is the result of the interplay of various factors…
I would like to stress once again China’s consistent position. We should pursue common, cooperative and sustainable security for all countries. The legitimate security concerns of all sides should be respected and resolved. We hope all sides will keep the door to peace open and continue to work for deescalation through dialogue, consultation and negotiation and prevent further escalation.
CCTV: Speaking on the Ukraine issue, US State Department spokesperson Ned Price said that China should respect the principle of state sovereignty and territorial integrity and that China has an obligation to urge Russia to “back down”. He also said the growing relationship between China and Russia is concerning. The two sides’ joint statement shows that China is trying to use its influence on Russia to create a world order both want. Do you have any comment?
Hua Chunying: I noted the remarks by the US State Department spokesperson.
First, when it comes to respect for state sovereignty and territorial integrity, I’m afraid the US is in no position to tell China off. The Chinese people have deep understanding and strong feelings about state sovereignty and territorial integrity through first-hand experience. Recent history saw China invaded by the Eight-Power Allied Forces and other colonialist powers, which left behind indelible poignant memories of national humiliation. Just a little more than 20 years ago, the Chinese embassy in the Federal Republic of Yugoslavia was hit by NATO bombing, which killed three Chinese journalists and injured many more. NATO still owes the Chinese people a debt of blood. Even today, China still faces a realistic threat from the US flanked by its several allies as they wantonly and grossly meddle in China’s domestic affairs and undermine China’s sovereignty and security on issues including Xinjiang, Hong Kong and Taiwan. China remains the only permanent member of the Security Council that has yet to realize complete national reunification. It is because of all these that China consistently and firmly uphold the purposes and principles of the UN Charter and basic norms governing international relations, firmly safeguard its sovereignty, security and territorial integrity, and firmly defend international equity and justice.
If we look at the US, during its nearly 250 years of history, there were only 20 years when it was not conducting military operations overseas. The pretexts it used can be democracy or human rights or simply a test tube of laundry powder or even fake news. Such a country’s understanding of respect for state sovereignty and territorial integrity is definitely different from ours. The international community can see this very clearly.
The US side suggests that Russia acted with complicit support from China. I don’t believe Russia would be too pleased to hear that. Russia is a permanent member of the UN Security Council and an independent major power. It is fully capable of formulating and implementing its diplomatic strategy independently based on its judgement and national interests.
I must also stress that China-Russia relations are based on the foundation of non-alliance, non-confrontation and non-targeting of any third party. This differs fundamentally and essentially from the practice of the US, which is, ganging up to form small cliques and pursuing bloc politics to create confrontation and division based on ideology. China has no interest in the friend-or-foe dichotomous Cold War thinking and the patchwork of so-called allies and small cliques and has no intention to follow such a path.
As to the China-Russia joint statement, I suggest the US side give it some further study. China and Russia aim to strengthen strategic communication and coordination, firmly uphold the international system with the UN’s central coordinating role in international affairs, and firmly safeguard the international order based on the purposes and principles of the UN Charter and international law. This shows exactly that China and Russia are acting responsibly and positively maintaining international strategic security and stability.
AFP: The Russians said they would not attack cities and they announced they were clearly targeting military targets. So is it okay for you to invade another country as long as they are hitting on military targets and not cities? And then you also said that the US has been supplying ammunition to Ukraine. But is it not the right of any sovereign country to buy arms and ammunition wherever it wants in order to protect itself?
Hua Chunying: I’m sure you have noticed that Russia stated that in its special military operation in Ukraine, its armed forces will not conduct any missile of artillery strikes on any Ukrainian city.
As to the definition of “invasion”, it brings us back to how we view the current situation in Ukraine. As we have stated repeatedly, the Ukraine issue has a very complicated historical background and context. The current state of affairs is not what we would hope to see. It’s hoped that all sides will work in concert to give peace a chance and strive to ease the situation as soon as possible through dialogue, consultation and negotiation.
As to the right of sovereign countries to buy arms, I have a question for you. If two people near you are arguing and a fist fight seems to be coming next, what will you do? Hand one of them a gun, a knife or some other sorts of weapon? Or break up the fight with persuasion first and then get to know the whole story leading to the argument and helping them resolve the issue peacefully? It’s as simple as that. Weapons can never solve all problems. This is not the time to pour oil on the flame, but to put our heads together to come up with a way to put out the fire and safeguard peace.
Here is another question. Western media used the word “invasion” for Russia’s operation. When the US took illegal unilateral military operations in Iraq and Afghanistan without the mandate of the UN and caused massive civilian casualties, did you use the word “invasion” or some other word?
Reuters: Does China believe Ukraine is a sovereign country?
Hua Chunying: Ukraine is for sure a sovereign country. China and Ukraine conduct friendly cooperation on the basis of mutual respect.
Reuters: Did Vladimir Putin tell China that he will invade Ukraine when he visited China a few weeks ago?
Hua Chunying: On February 4, President Putin visited China for the opening ceremony of the Beijing Winter Olympics and held a meeting with President Xi Jinping. The readout has been released, which you may refer to carefully.
As I said just now, Russia is an independent major country. It independently decides and implements its diplomacy and strategy based on its strategic judgement and interests. Russia does not need to get others’ consent before making diplomatic decisions and taking actions.
AFP: Are there any other circumstances whatsoever under which China would condemn Russia’s actions in Ukraine? Specifically, what will Russia do to see condemnation from China?
Hua Chunying: Why are you obsessed with China’s condemnation?
We have said that the historical merits of the Ukraine issue are very complex. The current situation after evolution is the result of multiple factors at play. The correct way is to learn the whole story and the evolving process objectively before resolving the issue through dialogue and consultation. The security of all countries should be common, comprehensive and sustainable. And only security like this is lasting.
You keep asking when will China join the US and some European countries to condemn Russia. This reminds me that it is the handful of countries you raised, including the US, that have been interfering in China’s internal affairs and attacking China based on disinformation.
In international relations, the last thing one should do is to impose his will on others. One should instead allow all countries to make independent judgement based on the merits of the matter itself.
Reuters: Did the Chinese leader give his blessing for President Putin to attack Ukraine?
Hua Chunying: I find such a way of questioning quite offensive frankly speaking. It exposes a certain stereotype of looking at China with preconceived notions, bias, arrogance and malicious characterization. China is not a direct party to this issue. All we have been doing is promoting peace talks.
Yesterday I shared our observations about all the ins and outs on this matter. President Putin also delivered a detail-rich speech. Why don’t you take some time to read them? Why not cool down, cast aside your entrenched notions, and look at matters from a rational and objective perspective? Who started the fire? Who fanned the flames? Who keeps pouring oil on the flame? It takes the person who started the trouble to end it. The parties directly concerned should be the ones to resolve the issue through negotiation.
Russia is an independent major power and a permanent member of the UN Security Council. It makes foreign policy decisions independently. China’s position is very clear. On regional hotspot issues, we consistently call for peaceful resolution through dialogue, consultation and negotiation. When countries like Iraq, Syria and Afghanistan were hit by illegal military operations, and when the seven billion US dollars of assets of the Afghan people were illegally plundered by the US recently, did you condemn any of it? Did you speak up for fairness and justice? Did you question the US government? That’s why I don’t think your question has the objectivity that a professional journalist’s question should possess. You are not neutral. You subscribe to preconceived notions. As a journalist, you shouldn’t impose your presuppositions on others.
The following day, February 25, Xi spoke to Putin. This is from the official readout:
President Putin set forth the historical context of the Ukrainian issue, Russia's special military operation in eastern Ukraine and its position. He noted that the United States and NATO have long turned a blind eye to Russia’s legitimate security concerns, and have repeatedly negated their promises to Russia. Their continued military deployment eastward has challenged Russia’s strategic red line. He also expressed Russia’s willingness to have high-level negotiation with Ukraine.
President Xi noted that the dramatic change of the situation in eastern Ukraine recently has attracted a high level of attention from the international community. China determines its position concerning the Ukrainian issue on its own merits. It is important to reject Cold War mentality, take seriously and respect the reasonable security concerns of all countries and reach a balanced, effective and sustainable European security mechanism through negotiation. China supports Russia in resolving the issue through negotiation with Ukraine. China has long held the basic position of respecting all countries’ sovereignty and territorial integrity, and abiding by the purposes and principles of the UN Charter. China is prepared to work with other members of the international community to promote common, comprehensive, cooperative and sustainable security, and to resolutely safeguard the UN-centered international system and the international order underpinned by international law.
And finally, today, February 26, Wang Yi outlined a "five point" plan following his phone conversations with UK Foreign Secretary Elizabeth Truss, High Representative of the European Union for Foreign Affairs and Security Policy Josep Borrell, and French Diplomatic Advisor to the President Emmanuel Bonne respectively:
1. China firmly believes that the sovereignty and territorial integrity of all countries should be respected and protected and the purposes and principles of the UN Charter abided by in real earnest.
2. China advocates common, comprehensive, cooperative and sustainable security. China believes that the security of one country should not come at the expense of the security of other countries, still less should regional security be guaranteed by strengthening or even expanding military blocs. The legitimate security concerns of all countries should be respected. Given NATO's five consecutive rounds of eastward expansion, Russia's legitimate security demands ought to be taken seriously and properly addressed.
3. China has been following the developments of the Ukraine issue closely. The current situation is not what we want to see. The top priority now is for all parties to exercise the necessary restraint to prevent the current situation in Ukraine from getting worse or even getting out of control. The life and property safety of civilians should be effectively guaranteed, and large-scale humanitarian crises, in particular, must be prevented.
4. China supports and encourages all diplomatic efforts conducive to a peaceful settlement of the Ukraine crisis. China welcomes the earliest possible direct dialogue and negotiation between Russia and Ukraine. The Ukraine issue has evolved in a complex historical context. Ukraine should function as a bridge between the East and the West, not a frontier in big power confrontation. China also supports equal-footed dialogue between the EU and Russia on European security issues, leading eventually to a balanced, effective and sustainable European security mechanism.
5. China believes that the UN Security Council should play a constructive role in resolving the Ukraine issue, and give priority to regional peace and stability and the universal security of all countries. Actions taken by the Security Council should help cool the situation and facilitate diplomatic resolution rather than fueling tensions and causing further escalation. In view of this, China has always disapproved of willfully invoking of UN Charter Chapter VII, that authorizes the use of force and sanctions, in UNSC resolutions.
A very brief survey of reactions from some Chinese experts that came to my attention. It goes without saying that consider these just as a flavour of the discussion and not to be treated as authoritative as the above official statements:
On Ukraine Taiwan comparisons, in Global Times:
For the China-Russia-US triangular relations, the sanctions that the West imposed on Russia are like "a test," said observers, because these sanctions could also happen to China in the future if the Chinese mainland is forced to solve the Taiwan question by non-peaceful means.
A Beijing-based expert who asked for anonymity said comparing the Ukraine crisis to the Taiwan question is not correct because Taiwan is not a country and the one-Chine principle is universally recognized by the international community. Even the US dares not abandon it openly. So even if China is forced to reunify Taiwan by force, China should not receive the same criticism that Russia has received now.
Lü Xiang, a research fellow at the Chinese Academy of Social Sciences, said China is way more connected with the world than Russia as China is the biggest and most energetic market and key supplier in many fields, and China-US trade ties are way more intertwined than US-Russia trade. So imposing sanctions on China in the future is unimaginable and extremely difficult for the US. How the world order would change is a question, but one thing is for sure: That with the big headache in Europe, the US does not have any more resources to build its anti-China Indo-Pacific Strategy, said Chinese analysts.
有凤Talk on Six Consequences:
The U.S. provoked Russia and Ukraine to go to war with the goal of attacking Russia and controlling Europe. Now that the goal has been achieved, Ukraine, as a pawn, has become an abandoned pawn. In my personal view, this war will have… serious consequences.
1. Humanitarian catastrophe
2: Russia will usher in an economic winter.
Since the Crimea crisis, the Western sanctions against Russia have not stopped, with more than 100 sanctions of various kinds. In this Ukraine crisis, although the West did not directly send troops to intervene, the sanctions imposed on Russia were unprecedented. The Russian economy is already in a recession, and the overwhelming sanctions from the West will only make the Russian economy worse. Next, the Russian people should be ready to tighten their belts to live and grit their teeth.
3. European geopolitics is being rewritten
Ukraine's process of joining NATO came to an abrupt end as Russian troops entered Ukraine's borders. However, Lithuania and other small Eastern European countries are taking advantage of Russia's military force, and in order to protect themselves, they may require a large number of US troops to be stationed in their countries. Although Russia used force to prevent Ukraine from joining NATO, the contradiction between Russia and NATO has not been resolved, the geopolitics of Europe has been rewritten, and the struggle will be more intense in the future.
4. The United States has to adjust its strategy.
The U.S. wanted to return to the Asia-Pacific and win over European allies against China. After the Ukraine war, the United States had to send more U.S. troops to Europe in order to protect its interests in Europe. At least in the short term, it is difficult for the United States to withdraw from Europe and must concentrate its efforts on uniting its European allies against Russia.
5: The contradiction between the United Kingdom and the United States and the European Union expands.
6. China is also under great pressure
During the Ukraine crisis, China remained neutral and did not help either side. But because of the close relationship between China and Russia, the West has always suspected that China is secretly supporting Russia. Now that Russia and Ukraine are at war, Western sanctions against Russia follow one after another, and at the same time, China is also required to follow and sanction Russia. If China does not comply, they will continue to slander China and even apply the sanctions against Russia to China... The United States will never allow China to "watch the fire from the other side and reap the benefits" and will try to pull China into the water. On one side is Russia, which is more than an ally, and on the other side is the ferocious West. China is also under great pressure.
Xu Wenhong of CASS on the economic consequences for Russia:
It is a very severe punishment for any country to be excluded from the SWIFT system. Some have even compared kicking out of the SWIFT system to a financial "nuclear strike". North Korea and Iran have already suffered such punishments and precedents. As a result, the economies of the countries kicked out have suffered unprecedented and severe consequences.
But this time Russia is not necessarily afraid. Because since 2014, Western countries have repeatedly threatened to kick Russia out. Although it was ultimately not implemented for various reasons, Russia turned into a crisis under this pressure, and took the opportunity to be fully prepared to resist a new round of Western sanctions. The first is to establish the Russian SPFS system, which can replace the SWIFT system to a certain extent. This system has achieved good development since its establishment in 2015, and it is basically no problem to solve the financial information flow in Russia.
As for the international financial information flow, at present, several other systems have emerged in the world, which can partially replace the SWIFT system. One of the most prominent is China's CIPS system, which is China's RMB cross-border payment system. In recent years, China's RMB cross-border payment system has developed very well. Since the sanctions against Russia by Western countries such as the United States and Europe have not been authorized by the United Nations, China has not participated in the sanctions against Russia by Western countries. Despite Western sanctions against Russia, Chinese companies can still maintain normal economic and trade relations with Russia. Therefore, if Western countries kick Russia out of the SWIFT system, on the basis of Sino-Russian strategic friendly cooperation, it is possible to encourage Russian financial institutions to accelerate the use of China's CIPS system or other systems.
Q: If Russia is kicked out of SWIFT, what impact might it have on China?
A: Simple logic, if Russia is kicked out of the SWIFT system, Russian financial institutions will likely actively use China's CIPS system. The use of China's CIPS system by Russia, a major energy country with frequent capital flows, will strongly promote the internationalization of the RMB, the diversification of the international currency market and the establishment of a new international financial and economic order.
That’s it for this issue. A final word from Evan Feigenbaum who sums up very well the "impossible balance" that Beijing is seeking as the situation unfolds in the days and weeks ahead (read in full here):
Beijing is trying to strike an impossible balance by seeking to pursue three goals simultaneously: a strategic partnership with Russia, commitment to long-standing foreign policy principles of “territorial integrity” and “noninterference,” and a desire to minimize collateral damage from EU and U.S. sanctions.
Beijing cannot reconcile these three competing objectives. And since it cannot have all three, it will have to jettison one or another, or else uncomfortably shift its position from day to day under the glare of international scrutiny. China’s almost certain choice will be to abandon its principles while prioritizing power politics and practical considerations.