Support 110 years of independent journalism.

  1. Comment
6 April 2022

Could Putin’s great gamble turn Russia into a Chinese vassal state?

The war in Ukraine might well force Moscow to bid for new fossil-fuel trading partners – but Beijing’s geopolitical strength should not be overestimated.

By Helen Thompson

The story of a rising China has been a pervasive one in geopolitical analysis over the past decade. It has also driven strategic thinking in cabinets and chancelleries across the world. Reflecting on China’s infrastructure investment, Joe Biden declaimed in February 2021, “If we don’t get moving, they are going to eat our lunch.” Since Russia’s invasion of Ukraine, China also appears to have strengthened its position relative to Russia. For some, Vladimir Putin’s hubris will now accelerate Beijing’s ascendancy over Moscow to the point where Russia will become in effect a Chinese resource colony.

China’s rise from its relative insignificance five decades ago is indisputable. Its economic size alone also makes it relatively resilient to Washington’s efforts to contain its advance. Although Donald Trump declared a trade and technological war that Biden has continued, China remains far too attractive a market for large Western companies to forsake. Over the past few years of supposed decoupling, Wall Street has deepened its presence in the Middle Kingdom: in 2021, Goldman Sachs and BlackRock, the world’s largest asset manager, unveiled joint ventures with Chinese banks giving them unprecedented access to the Chinese savings market. China also dominates the supply chains around those metals that are essential for the green energy transition.

[See also: United on Ukraine, Nato powers now see the world from Warsaw’s point of view]

The war in Ukraine is a watershed moment. In inciting horror in European capitals by its artillery and air assault on Ukrainian cities, Moscow has inflicted an energy shock on itself as well as the world. With European governments now committed to eliminating energy dependency on Russia, Gazprom and Rosneft – the country’s leading gas and oil companies, respectively – must increase Asian, and especially Chinese, sales. Since it is difficult to send gas from the west Siberian fields to Asia, Russia will have to provide its supply from elsewhere, including the underdeveloped Arctic fields. The imperative invites serious logistical adversity. As one Russian energy executive admitted in 2017, since Russian “reserve quality is going down, year on year”, advanced technology is essential for new production, and what is available internally is inadequate for the task. With the Western oil majors, such as Shell, announcing that they will end their equity partnerships with Gazprom and BP abandoning its stake in Rosneft, Russia’s state-led energy firms urgently need Chinese capital and technology.

But China’s geopolitical strength should not be overestimated. Like Russia, China is a revisionist power courting high risks. Its actions have already incentivised a coalition of Pacific powers into an alliance against it. It is pursuing a project of territorial reunification that incites resistance from those subject to its ambition. For China, the “century of humiliation”, which began with the arrival of British ships in the Pearl River in 1839, will not be over until Taiwan is once more part of China. But since there appears no plausible pathway to a peaceful union, this ambition commits China to a military confrontation with the US and, quite probably, Japan and Australia. It would also entail an amphibious invasion by an army with no battle experience and soldiers who would be asked to kill fellow people of Chinese extraction in the name of unity.

[See also: Profits from fossil fuel energy power Russia’s war machine, and Ukraine suffers]

China also has acute vulnerabilities with respect to energy. Its advances in green energy can’t change the fact that 84 per cent of its primary consumption comes from fossil fuels, leaving its economy and military with a foreign-dependency problem. China is the world’s largest importer of oil. For nearly two decades, strategic Chinese thinking has been permeated by what former president Hu Jintao named the “Malacca dilemma”: how to prevent the US navy from blockading tankers bringing China’s oil imports from the Persian Gulf and Africa through the Malacca Strait – the narrow body of water that is the shortest passage between the Indian Ocean and the South China Sea. Meanwhile, China’s growing demand for gas cannot be satisfied by its domestic sources: China’s gas imports grew by 20 per cent in 2021, with purchases from Russia increasing by 50 per cent. Even China’s coal supply is not secure. Between September and November last year, a coal shortage led the State Grid Corporation to ration electricity to the industrial sector.

History suggests that dominant powers need their own energy-resource base. When in the 1970s the US became a large-scale oil importer, its monetary and financial power served as compensation by ensuring it could pay for foreign energy purchases in its own currency. China does not have this luxury, and its reliance on foreign oil as a proportion of its total consumption is more than 10 per cent higher than the US peak in 2005. Lacking American conveniences, China’s options are more like Germany’s. From the late 1950s until February this year, Germany prioritised a fossil-fuel relationship with resource-rich Russia in exchange for access to technology and finance. After the Cold War ended, German energy companies also sought production partnerships in Russian fields, to the point where Gazprom and Rosneft ended up owning large German gas storage facilities and refineries – an involvement that now constrains German decision-making.

The balance of power between Russia and China pits the forces of energy against those of technology. In this battle, China is unlikely to reap the rewards of its technological prowess until the age of fossil-fuel energy ends.

[See also: The age of plutocracy]

Select and enter your email address Your weekly guide to the best writing on ideas, politics, books and culture every Saturday. The best way to sign up for The Saturday Read is via The New Statesman's quick and essential guide to the news and politics of the day. The best way to sign up for Morning Call is via
  • Administration / Office
  • Arts and Culture
  • Board Member
  • Business / Corporate Services
  • Client / Customer Services
  • Communications
  • Construction, Works, Engineering
  • Education, Curriculum and Teaching
  • Environment, Conservation and NRM
  • Facility / Grounds Management and Maintenance
  • Finance Management
  • Health - Medical and Nursing Management
  • HR, Training and Organisational Development
  • Information and Communications Technology
  • Information Services, Statistics, Records, Archives
  • Infrastructure Management - Transport, Utilities
  • Legal Officers and Practitioners
  • Librarians and Library Management
  • Management
  • Marketing
  • OH&S, Risk Management
  • Operations Management
  • Planning, Policy, Strategy
  • Printing, Design, Publishing, Web
  • Projects, Programs and Advisors
  • Property, Assets and Fleet Management
  • Public Relations and Media
  • Purchasing and Procurement
  • Quality Management
  • Science and Technical Research and Development
  • Security and Law Enforcement
  • Service Delivery
  • Sport and Recreation
  • Travel, Accommodation, Tourism
  • Wellbeing, Community / Social Services
Visit our privacy Policy for more information about our services, how Progressive Media Investments may use, process and share your personal data, including information on your rights in respect of your personal data and how you can unsubscribe from future marketing communications.

Content from our partners
What you need to know about private markets
Work isn't working: how to boost the nation's health and happiness
The dementia crisis: a call for action

Topics in this article : ,

This article appears in the 06 Apr 2022 issue of the New Statesman, Easter Special