This week, we’ve been looking at the geopolitical repercussions of Putin’s war on Ukraine. On Tuesday it was the NATO alliance and European politics, and yesterday Eastern Europe, Canada and America. (You’ll find all my Ukraine issues here.)
I’ve saved what is arguably the biggest issue until last: as Russia becomes an outcast pariah among Western countries, it must necessarily draw its few remaining friends even closer (whether they like it or not). This could significantly affect the relationships China and India have with the rest of the world.
Putin’s decision to invade Ukraine may just bifurcate the world geopolitical order, which could have more impact on the future than a new Cold War with Russia…
Russia’s invasion of Ukraine has made it a global pariah state, with China as its only major ally. Many pundits believe Putin’s grand ambitions for a new Russia Empire will instead leave his country a vassal state to China…
Chinese president Xi Jinping and Russian president Vladimir Putin have met for 38 rounds of bilateral talks in the past 9 years, including a high-profile summit in February, solidifying their “comprehensive strategic partnership of coordination for the new era.” Although they have no military alliance, Russia and China have repeatedly vetoed US proposals at the UN Security Council, and share concerns about NATO expansion. Xi has called Putin his “best friend,” and has openly declared his support for Russia after the recent sanctions. (At the same time, Xi now looks like Putin’s only friend, aside from a few small-time dictators.) Yale historian Arne Westad says “This is the first global crisis that I can think of where China might possibly have a greater impact than the United States.” Harvard Magazine
“Moscow and Beijing aren’t simply trying to carve out spheres of influence. They are also trying to rewrite the rules of global governance on issues from internet norms to human rights to conceptions of sovereignty.” – Hal Brands, global affairs prof, Johns Hopkins
A Common Enemy
Chinese president Xi Jinping has long chafed against the American “financial hegemony” and its ability to impose unilateral sanctions, and has overtly expressed disapproval of the sanctions against Russia. China is slowly building a new world order to counter the global system led by America, becoming steadily less reliant on resources and products from the US and its allies, while extending Beijing’s political and business influence throughout emerging countries under the “Belt and Road Initiative” (building infrastructure in needy nations). China has cut off the global internet with a “Great Firewall,” as Western nations ban some Huawei technologies. As a senior fellow at the Carnegie Moscow Center puts it, “anti-Americanism is the secret sauce” of the friendship. The Atlantic
“In Washington, ostensibly improving ties between China and Russia have security experts worried that the US will need to contend with an unholy alliance of the world’s two most powerful authoritarian states determined to reshape the global order in their favour.” – Michael Schuman, nonresident senior fellow, Atlantic Council’s Global China Hub
And yet, is it an equal friendship when one’s economy is 10x the other’s? For years, Russia has been growing dependent upon China, almost “like a giant North Korea” (which depends on China for 90% of its trade). Trade between Russia and China rose by 50% since 2014, and China is Russia’s single largest trading partner. Russia is Beijing’s largest recipient of state sector financing. Now facing expansive economic sanctions, Russia may have few other markets for its oil and gas, and Beijing is “strongly considering taking a stake in the Russian energy giants left in the cold by Western corporations.” The official position in Beijing is that “China and Russia will continue to conduct normal trade cooperation.” (In fact, the Feb 4 agreement included 10 concessions to help China offset expected sanctions from the West.) But Beijing may be reluctant to throw Moscow an economic lifeline, for fear that the West will impose secondary sanctions on China in response. Especially for technology companies, “undermining business relationships with the West to build up ties with Russia is not an attractive trade-off.” The Atlantic | Washington Post | Sydney Morning Herald
China claims it is neutral and respects the sovereignty of all countries, but it has abstained from UN votes regarding the Ukraine crisis, and echoed Putin by blaming NATO and the US for the situation. In fact, Putin and Xi met on Feb 4, and issued a joint statement criticizing NATO expansion and pledging to work against the West in a partnership that had “no limits.” Most believe, however, that China would not support Russia if it used nuclear or chemical weapons in Ukraine – so there might be “limits.” In fact, the US warned China that military aid or assistance in sidestepping sanctions would be “costly” for China. (Intelligence sources claim that Moscow requested military equipment from Beijing, but both countries deny it.) Washington Post | Harvard Gazette | Newsweek | CTV
“[NATO] should not seek its own absolute security… The pursuit of absolute security actually leads to absolute insecurity.” – Le Yucheng, Chinese vice foreign minister
Arguably, the protracted and bloody war in Ukraine is proof that “Russia is no longer a superpower,” with an ill-resourced and ill-trained military. (And with global sanctions in place, “this is as strong as Russia’s going to get.”) Ever since Russia’s troops were massing outside Ukraine’s borders, commentators have mused that Putin might have been waiting until the Winter Olympics closed on Feb 20, before upturning the world order on Feb 24. (US officials say China asked for the delay; less kind observers suggest that Putin needed to ask Xi “for permission.”) Some analysts believe Putin misled Xi about his plans for Ukraine, and providing China’s support was “an extraordinary blunder” that puts China in a “lose-lose situation.” Others argue that “a Russian puppet state” is exactly what Xi wants. Washington Post | New York Times | The Atlantic
Whatever happens, the world has been turned upside down since 1949, when Chairman Mao appealed “hat in hand” to Joseph Stalin for financial and military aid, “the destitute supplicant before the undisputed don of the Communist world.” China’s economy and technology now dwarfs Russia’s, but experts observe that Putin’s fate nonetheless “directly implicates China’s core security interests.” Jude Blanchette argues that Xi cannot afford an unstable regime in a nuclear power with a 2,500-mile shared border: “the worse things go for Putin in Ukraine, the more China will back him.” Sydney Morning Herald | Washington Post
“If Beijing turns toward and not away from Moscow as the war grinds on and the extent of human suffering increases, the basic trajectory of China’s relations with the West will undergo a profound shift toward open rivalry.” – Jude Blanchette, chair of China studies, Center for Strategic & International Studies
Every commentator I’ve seen has described India’s dilemma as “walking a tightrope” politically, as it tries to compartmentalize and maintain strong ties with the US, Russia, and Ukraine alike…
The world’s largest democracy, India, has refused to sanction or condemn Russia for its invasion of Ukraine, and consistently abstained from UN votes on the matter. (Although PM Narendra Modi did appeal to Putin for a cessation of violence, and some of his statements have been obliquely critical of the invasion.) Historically, India remained neutral between Eastern and Western Bloc countries in the Cold War, leading the non-aligned movement, and it seeks to maintain as many multilateral relationships as possible. For decades, India and Russia have had what has been called a “reciprocity of silence.” Russia has aided India in its conflicts with neighbouring Pakistan, and India was the first Asian country to recognize Putin’s annexation of Crimea in 2014. While India has also been developing its Western ties, these are moderated by some lingering resentment of British colonial rule. Indian Express | Times of India | The Atlantic
Caught in the Middle
The US, EU, UK, Australia and Japan have all attempted to persuade India to change its stance, but India’s allegiances are torn between Russia and Ukraine itself. India has a “special and privileged strategic partnership” with Russia, and does $30B in annual trade. India depends on Russia for at least 60% of its military arsenal, and substantial oil, fertilizer and pharmaceutical imports – but it also imports weapons systems from Ukraine. Almost 20,000 Indian students were studying in Ukraine this year, but they reportedly got special treatment from Putin himself, who instructed troops to make every effort to protect them, and provided humanitarian corridors and even transportation out of the country. India cannot afford to alienate either the US or Russia when it is defending disputed borders with China and Pakistan, and the West needs India as counterpoint to China in the Asia-Pacific – but India cannot afford to let Moscow grow closer to Beijing. Washington Post | CBC | Vox
Beyond India and China, other countries with strong Russian ties have been caught off-guard by the invasion of Ukraine, and are trying to manage their equally important relationships with the West…
The New Neutrality
As even Switzerland broke 200 years of neutrality to impose banking sanctions on Russia, other rising powers appear to be distancing themselves from American influence, and trying to maintain neutrality regarding the war on Ukraine. 35 countries in the global South (including China and India) refused to sanction or condemn Russia for its invasion of Ukraine, and abstained from UN Security Council votes on the crisis. (Half of the abstentions came from African countries which depend on Russian military equipment and/or Kremlin-connected mercenary troops.) Only 4 countries overtly voted with Russia: Belarus, North Korea, Eritrea and Syria. (All have been called “dictatorial pariah states.”) South Africa is among those attempting to remain “non-aligned” – prompting critics to quote the late Desmond Tutu: “If you are neutral in situations of injustice, you have chosen the side of the oppressor.” The Telegraph
“If you are neutral in situations of injustice, you have chosen the side of the oppressor.” – Desmond Tutu, former Archbishop of Cape Town, South Africa
Putin’s Middle East Strategy
For years, Putin has been forming security alliances with autocrats and rebels in Africa and the Middle East who are out of favour with the US and Europe, from Syria, Sudan, Libya and Mali to the UAE. “Russia is trying to show itself as a great power,” and is trying to “encircle NATO” instead of the reverse, by establishing air and naval bases. As a result, the United Arab Emirates and other Gulf states have tried to stay neutral between their Western allies and Russia, which is a member of OPEC+. The UAE has government investments in Russia and depends on Russian weapons and military equipment. (The US has been hesitant to sell F35 fighters to the UAE “due to concerns of civilian casualties in the ongoing war in Yemen, and of Abu Dhabi’s growing relationship with Bejing.”) UAE political leaders have been strengthening ties with Moscow even as Russia invaded Ukraine, and floating the possibility that they might serve as mediators between Putin and Biden. As one UAE politics prof put it, the country is positioning itself for a “post-American world,” in which there is “less of America” and “more of China.” Newsweek | National Post | CTV | The Telegraph
“Asia is definitely the future… If there is this post-American world… less of America probably translates into also more of China.” – Abdulkhaleq Abdulla, political science prof, UAE
Israel’s Delicate Position
Like India, Israel has had to balance its strong relationships with the US and Ukraine’s Jewish president, Volodymyr Zelensky, against its own reluctance to provoke Russia by openly condemning the war on Ukraine. Israel has “delicate military and security problems” in neighbouring Syria, where Russia has air superiority, but allows Israel to continue its campaign against Hezbollah. Russia is expanding its presence in the Mediterranean region, stepping into the power vacuum as America has in some sense “left without leaving,” focusing its forces elsewhere. And over the past 30 years, 1.2M Russian speakers have immigrated to Israel, where they form 12% of the electorate – and depend heavily on Russian media for their news. Israel also does not want to inflame antisemitism against Jews in Ukraine or Russia. Israeli PM Naftali Bennett has tried to broker a ceasefire, without success, and while Israel has offered Ukraine some humanitarian aid, it has repeatedly rejected requests for military or intelligence equipment. Washington Post | New York Times
The world order may have hit a tipping point with the invasion of Ukraine, prompting nations to choose a side…
The World Splits in Two
Since the fall of the Berlin Wall and the disintegration of the Soviet Union, globalization seemed to be inevitable – but in the wake of the 2008 financial crisis, the US-China trade war and the pandemic, nationalism seems to be regaining ground. Putin’s invasion of Ukraine has vastly accelerated the process, as the West imposed breathtaking economic sanctions on Russia, and seeks to develop domestic resources and manufacturing capacity. China’s zero-COVID policy has hardened borders and confirmed the need to rebuild vulnerable supply chains – a “Great Disentangling.” (And president Biden is openly musing about expelling Russia from the G20.) The Atlantic
“The golden era for globalization ended with the global financial crisis in 2008.” – Carmen Reinhart, chief economist, World Bank
“The West faces a Chinese-Russian alliance seeking to reshape the world order… Instead of this axis being led by an autarkic and sclerotic Muscovite empire, the senior partner is a technologically sophisticated giant that is deeply integrated in the world economy.” – Tom McTague, in The Atlantic
So, what could this global bifurcation mean?
Global currency reserves may become bifurcated, if Russia, China and other non-Western governments shift away from the US dollar to the currency of their allies, warns the Conference Board of Canada. That could mean the US would lose the “exorbitant privilege” it has enjoyed since WW2, to run massive deficits, enjoy cheap interest rates, impose economic punishments on others, and never worry about currency collapse. Some leading economists believe that “weaponizing” the US dollar through economic sanctions on Russia might just trigger a shift to alternatives – perhaps even cryptocurrencies – by Russia and China in particular.
An alternative internet could arise too, entirely disconnected from the West. Russia has already banned numerous social media platforms, while China’s “Great Firewall” controls its citizens’ access to the wider world. (And domestic platforms from TikTok to Alibaba have established an alternative online world.) At the end of March, Beijing unveiled the “Smart Education of China” initiative, a set of online learning platforms with 20,000 university courses and “a notable milestone in the nation’s education digitalization strategy.”
New high tech competitors may arise in Russia, China and Iran in response to boycotts and sanctions by Intel, Microsoft, Google, Amazon and Apple. Silicon Valley’s global dominance could erode in just a few years, warns the Washington Post, impacting those companies economically, and impeding American intelligence activities (which are adept at exploiting US-made tech). Yandex is already the most popular search engine in Russia. Chinese software platforms and electronics manufacturers like Huawei are already poised to shift the global balance of power. And Putin may well legalize software piracy to work around Silicon Valley’s sanctions – or at least look the other way, as he has for hackers and cybercriminals.
Chinese academics are being “quarantined from the world,” observes Georgetown U historian James Millward. Chinese security officers are reportedly preventing some scholars from attending international conferences in-person or online, and interrogating some who deliver papers virtually that are ideologically “incorrect.” Likewise Russian universities have been increasingly “inward-looking,” says a UC Berkeley researcher, and STEM academics in particular may be cut off from Western conferences and journals, and forced to rely on China as a scientific partner more than ever. (Co-authored publications between Chinese and Russian researchers more than quadrupled between 2011 and 2020.) NPR | Times Higher Ed
Private sector innovation will also be stifled, simply due to heightened geopolitical risk, say 3 business and finance researchers, based on their study of 4,625 US companies. In the past 30 years, the number of patents filed, stock gains and citations all declined for 3-5 years following increases in the US Federal Reserve’s monthly geopolitical risk index. (The patents were also more likely to be incremental, rather than breakthrough innovations.) “Geopolitical risk leads companies to launch fewer new, innovative product development projects.” Key factors are that companies’ investments in R&D fall, while turnover among their inventors and scientists rises. (The loss of human capital explains 9x more of the effect.) What’s more, patents fell 3x more in response to geopolitical threats than actual events: “Fear of the unknown is often worse than fear of the known.” Harvard Business Review
So the geopolitical repercussions of the war on Ukraine may impact student inflows from our 2 largest source countries (India and China), decouple China and Russia from the West’s financial systems, internet, MOOCs, academic conferences and journals, disrupt supply chains and manufacturing that depend on China, and gradually diminish American economic, military and political strength. Uncertainty could stifle innovation, likely not only in corporations but also among their PSE partners.
In the worst case, scientific espionage, IP piracy and cyberwarfare would intensify in Russia and China, and the world would see the superpowers vie for supremacy in artificial intelligence and robotics. (Of course, that’s already happening anyway.)
That’s more than enough for today! I hope this week’s exploration of the geopolitical repercussions of the Ukraine crisis has touched on some of the ways they will impact CdnPSE – but please drop me a note if you can think of other ways!
Time, once again, for a palate cleanser. As we head off for the Easter long weekend, here’s one early bird Easter vid that gets the #ICYMI worm…
Symbols of Easter
Camosun College anthropologist Nicole Kilburn stars in this polished 6-min video exploring the symbolism of decorated Easter eggs and rabbits, and their connections to rebirth, renewal, the vernal equinox, fertility rites and Christian resurrection. Rabbits in medieval manuscripts were actually pretty menacing, decapitating and dismembering people – but their PR has come a long way since then. “Given rabbits’ proclivity to procreate, they are often associated with pre-Christian fertility goddesses who were often celebrated at the start of spring.” Easter is now the #1 “candy holiday,” with $800M spent on 66 million kg of chocolate and sugar. (So enjoy, in moderation!) YouTube
As always, thanks for reading!
Most of you will be out of the office for Good Friday tomorrow, and some even out for Easter Monday too. Personally, I have a really busy week coming up next week, so I suspect I will have to take an extended break from this newsletter. (Hopefully, the bad news from Ukraine and COVID19’s 6th wave will give us a break, too!)
Wishing you a peaceful and “hoppy” Easter weekend, full of chocolate and/or time with friends and family – safely, of course!
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