China can and will keep the Russian economy on life support via goods trade. So begins a truthful report by Christopher Granville for TS Lombard describing the increasing influence of China on the outcome of the Russo-Ukraine war raging right now.
The upside of that truth? Russia is less likely to commit (more) desperate acts to survive Western sanctions. The less obvious downside of it? China becomes the king-maker in a conflict between Europe and Russia as preventer of those desperate acts. In being king-maker, and war-preventer, they could become one step closer to reserve currency.
CHINA DECIDES WHO WINS THE WAR
Here's an idea. How about you and him go have a nice fight.
At first glance, China’s stated neutral stance may not seem a very powerful position. Politically this is largely correct. Not lending overt weapon-support or mediating on Russia’s behalf hardly seem like power plays on China’s part, right? But economically the picture is much smarter for them to remain neutral. As the report states:
China’s do-nothing approach could prove important in keeping the Russian economy on life support.
And this is the brilliance of China’s strategic neutrality. Their keeping the Russian economy barely alive serves as a backstop preventing escalation into global conflict. The West knows this and must deal with it. Without China’s oil demand, the West’s sanctions are a declaration of World War on Russia.
Conversely, Russia knows that without Chinese demand; Their economy is screwed. Putin would risk civil war. He would then either escalate hostilities or capitulate to Western sanctions.
Enlargement of PPT available by kliking on graphic embedded in article.
