China’s dilemma in the stress field between geopolitics and hegemony

The Olympic Winter Games in Peking demonstrated to the world the congenial relationship between the two major powers Russia and China. Nevertheless, since the outbreak of war, Xi Jinping has refrained from proactively aligning himself with Putin. For a very good reason: the war in Ukraine reveals two dilemmas in China’s self-perception.

Analysis based on what we know on Day 79

© Vontobel, May 13, 2022, 11:00 a.m.

Video recording of a discussion between Dan Scott, Head Vontobel Multi Asset, and Markus Herrmann Chen, Managing Director, China Macro Group (CMG), a European research-based consultancy focused on China.


Why is China ambivalent? Two structure-related reasons

1. China's political dilemma

The human suffering in Ukraine, which has been worsening over the last weeks, is not leaving the people of China cold. So, Peking cannot openly speak in favor of Russia’s war.

However, China does have geo-strategic interests in a partnership with Russia. This is driven by, on the one hand, a joint alliance against the West—based on the adage “my enemy’s enemy is my friend”. On the other hand, China would have access to Russian military technology and strengthen its energy and food supply chain. The greater the risk of a geopolitical decoupling between East and West, the more important autarkic partners become. Chinas declaration about making state IT completely independent from Western components, is just one of the latest examples of a polarization which has been growing ever more noticeable over the last years.


2. China's normative-conceptional dilemma

On the world stage, China demonstratively champions territorial integrity. The permanent member of the Security Council used its right of veto eleven times in the last decade. Mainly when the sovereignty of another state was called into question—for example, in the context of the conflict in the Middle East.

Nevertheless, China places great value on the regional security interests of other states. From the Chinese perspective, this is the very argument with which Putin’s actions in Ukraine could be justified. Integrity and security become embroiled in a normative conflict.



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