There is a renewed attention on cross straits scenario post Ukraine crisis, especially in the case of China trying to take over Taiwan by force.
CIA Director William Burns recently opined that the “bitter experience” of the first 10-11 weeks of the Russia-Ukraine conflict has come as a surprise for China and their leadership is assessing the costs and consequences of any future use of force to gain control over Taiwan. He said that Chinese President Xi Jinping is “unsettled” because of the “economic uncertainty” and “reputational damage” due to China’s association with the “brutishness of Russia’s aggression” against Ukraine.
Meanwhile, Taiwan’s Foreign Minister Joseph Wu expressed hope that the international community would support the Taiwanese government in case of Chinese invasion, and would place sanctions on China in the same way the sanctions were imposed against Russia.
Some reports indicate that discussions have already begun within China in terms of legal measures to avoid repercussions impinging on International law in case of Chinese invasion of Taiwan. The suggested measures are: (i) China should stress that its actions are on legal basis under the UN Charter; (ii) Cite Article 2 and its Section 4 to deem its operations as “legal use of force”; (iii) In case of any foreign support to Taiwan, cite Section 7 of Article 2 to warn such state to stay away; (iv) Counter the countries that support Taiwan with diplomatic and economic sanctions; and, (v) China could exercise its jurisdiction over Taiwan’s EEZ to impose total blockades and embargos.
Meanwhile, the Chinese authorities are conducting a large-scale check of the stability of the Chinese economy amid concerns about sanctions over cooperation with Russia. Chinese companies are quietly assessing the risk of “secondary sanctions” if they keep supplying Russia with products that may involve US technologies. Earlier, the Financial Times had reported that the Chinese authorities held an emergency meeting with bankers due to the risk of Western restrictions.
According to a CNN report, China is extending an olive branch to the US in a bid to prevent Chinese firms from being kicked off the US stock market as fallout of the sanctions. On April 30, the China Securities Regulatory Commission, the country’s top securities watchdog published a draft rule changing a decade-old rule that forbids Chinese firms from sharing sensitive data and financial information with overseas regulators. Now the draft says that inspections shall be ‘conducted through cross-border regulatory cooperation’.
While the above measures insinuate China’s bid to appear neutral and shake off mounting political pressure from both Beijing and Washington, on ground reports suggest otherwise. China’s trade relations with Russia continue unhindered. As per ‘Financial Times’ report, China’s independent refiners are discreetly buying Russian oil at highly discounted prices as Western countries have suspended their own purchases. The deals with Russian oil suppliers have not been officially reported since the start of the Ukraine war to avoid scrutiny and coming under the ambit of US sanctions.
China’s alumina exports (used to make aluminium) to Russia have skyrocketed since the beginning of Ukraine conflict, leading to halting of shipments from Russia’s two key suppliers of the metal, i.e. Ukraine and Australia. According to Chinese customs data, in March, Russia bought 9,950 metric tons of alumina from China, which is almost 10 times more than what Russia purchased in the same period a year earlier.
Meanwhile, Beijing’s Ambassador to Moscow, Zhang Hanhui stated that Chinese and Russian Central Banks will discuss the use and promotion of their respective national payment systems ‘Mir’ and ‘UnionPay’ in both countries. ‘Mir’ and ‘UnionPay’ are among the few options left for Russians to make payments abroad since Russian banks were isolated from the global financial system.
Beijing appears to be jittery in dealing with the Ukraine crisis. While the apprehension of secondary sanctions is compelling it to align with the West, the economic benefits arising out of collaboration with Russia are pulling it in other direction. Moreover, China will also make efforts to tone down the rhetoric over Taiwan issue that has got renewed attention amid the Ukraine crisis.