Will the slew of sanctions that have been thrashed against Russia by the US and its allies boost China’s rise as an alternative superpower? While China is carefully monitoring the developments, many believe that the sanctions will not only deal an “unimaginable” blow to Russia, they will not spare the west as well. Several foreign policy watchers said that Beijing could turn out to be the real winner.
Interestingly, until Russia’s invasion of Ukraine, China was the primary enemy for the US but has changed within days.
Russian President Vladimir Putin, “through his war of aggression, is unwittingly helping Beijing, including distracting the U.S. from its China challenge,” geostrategic expert Bhahma Chellaney wrote in an article published by Washington based news organization, the Hill. The article added that the war, which has the makings of a drawn out and dangerous confrontation between Russia and NATO, will help Chinese President Xi Jinping’s pursuit of the “China dream.”
For one, Russia will be further pushed towards China, which is already one of its biggest trade partners, and second, it may even expand the usage of Cross-Border Interbank Payment System (CIPS), Beijing’s indigenous payment system across the world platform. As part of the sanctions, Russian banks and companies have been barred access from the SWIFT payment system.
With the SWIFT payment system being cut off, several countries, which adopted a neutral position in the Russia-Ukraine war, have already started looking at alternative payment mechanisms bifurcating the US dollar.
In 2021, trade between Russia and China was estimated at about $147 billion, though the European Union topped the chart for Moscow.
Russia and China have now set a target of taking bilateral trade to $250 billion by 2024.
Recently the two countries signed a mammoth $ $117.5 billion energy contract. Moscow is already Beijing’s third-largest gas supplier.
According to a Reuters report, Harry Broadman, a former U.S. trade negotiator said that the new sanctions could prompt Russia to try to deepen its non-dollar denominated trade ties with Beijing in an effort to skirt the restrictions.
Also read: Sanctions against Russia disrupt global supply chain network
“At this point, nothing can be said definitively but as Russia is pushed more and more to a corner, there is a possibility that dollar based payment could lose its predominance. But as the situation is grave and fluid, we will come up with concrete analysis only after a period of time,” an analyst with a research outfit told India Narrative.
