The Ukraine war is great for China — it gets 'fire sale prices' on oil and gas and leaves its rivals, the US and Russia, 'tied down and bleeding each other,' experts say

11 months ago 56
  • China says it's neutral in the Russia-Ukraine war and even tried to broker a peace deal earlier this year.
  • However, experts told Insider that China has good reason to stay friendly with Russia as war wages.
  • China is pocketing discounted oil and gas and enjoying geopolitical perks as a result of the war.

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Russia's brutal war in Ukraine has wrought devastation in the East and donations from the West. But amid the chaos and costs, there's at least one country reaping the benefits of the brutal conflict, two Russia experts told Insider.

"This prolonged war is good for China — it gets cheap oil and gas from Russia, it sells to Russia sanctioned products at inflated prices, and both of its global rivals — Russia, and especially the West — are tied down and bleeding each other," said Robert English, a professor at the University of Southern California who studies Russia, the Soviet Union, and Eastern Europe.

The US has sent tens of billions of dollars in aid to Ukraine since the war began in February 2022, prompting some American politicians to call for an end to the assistance, citing the staggering figures.

China, meanwhile, has presented itself as officially neutral in the conflict, but in reality, has only increased its dealings with Russia since the invasion. 

A Politico report this week found that China has sent Russia significant amounts of military equipment, including $100 million in drones this year alone. The imports exploit a loophole in Western sanctions due to their status as nonlethal and dual-use, which means they can serve both civilian and military purposes.

China has repeatedly denied supplying Russia with military equipment. But two experts who study Russia told Insider that China has good reason to stay friendly with its Eastern neighbor as war wages. 

China — now Russia's largest oil buyer — is getting "fire sale" prices on oil and gas, Simon Miles, an assistant professor at Duke University's Sanford School of Public Policy and a historian of the Soviet Union and US-Soviet relations, told Insider.

Beijing imported a record-high amount of Russian crude in the first half of the year, benefitting from discounted prices Moscow has been forced to impose after Western sanctions saw Europe slash its dependency on Russian oil following the invasion. 

Russia is desperately strapped for cash, and China conveniently has plenty of purchasing power, Miles said, adding that China could plausibly emerge from the war as a major stakeholder in the Russian economy.

"As the war continues, the Chinese will find a lot of opportunities to do what they've done in Africa and Latin America: glom onto chunks of the Russian economy at fire sale prices," Miles said.

On top of discounted crude, China is also enjoying geopolitical perks as a result of the war as it aims to increase regional dominance.

"They are getting a Kremlin that is totally fixated on the West and is not really paying attention to events in the East," Miles said. 

China and Russia's shared grievances against the West make them understandable, if uneasy allies, English said. 

"They both reject the US dominance of the global order, they both resent the US exercising its power right up to their borders, and they both have deep and often justified grievances against the West," he told Insider. 

But how long the tenuous partnership between China and Russia can last is unclear. 

"The fundamental of the China-Russia relationship is that both parties believe the other is the junior party," Miles said. "That's a shaky foundation to build a relationship."

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