Sanctions On Russia Could Tame China’s Ambitions Over Taiwan
Sanctions imposed by the U.S. and its allies against Russia for invading Ukraine could tame China’s ambitions to take over Taiwan in a Russian-style war.
Russia may win the war against Ukraine. But in every war, there’s collateral damage, which in this case isn’t just the Ukraine economy. It’s the Russian economy, too.
The sanctions cut it off from most of the global economy. That’s something no economy can afford these days without lasting consequences. Russia’s equity and currency markets collapsed, with the Russian ruble losing almost half of its value against the major currencies, currently trading at $0.01.
Foreign firms are fleeing Russia one after the other, inflation is soaring and the nation’s gross domestic product is plunging.
Russia’s dire economic situation sends a strong message to any country with territorial ambitions, including China, which wants the unification of Taiwan with the motherland by all means: Go ahead, fulfill your aspirations, and risk destroying your economy.
“On balance, I do think that the current situation will give China pause for thought,” said Jonathan Flint, the Inamori Emerging Visiting Scholar from the College of Arts and Sciences at Case Western Reserve University. “The U.S., in concert with NATO, other allies, and partners, has managed to create a comprehensive sanctions regime against Russia that still can escalate – we initially saw oil protected, but now import bans are beginning to be imposed. We are also seeing the increase of other trade pressures and bans of, for example, luxury goods. China will, undoubtedly, be watching the effects [and speed of imposition] of the sanctions very closely.”
Flint thinks that the West’s sanctions against Russia have been swift, united and effective, creating both internal and external problems for Beijing.
“The sanctions have, for want of a better word, been reasonably ruthless to named Putin supporters and the wider economy,” he said. “The issue here, for China, is both internal and external. China has a need to keep trading. It has an advantage in labor and production – which needs markets to sell to. It also has an increasing urban middle class used to a level of consumption. China has, for the most part, agreed to allow people to grow rich and consume as long as they stay out of politics. If politics intervenes in this, that bargain may no longer hold. Chinese leadership may find that wealthy citizens, and the aspirational middle class, turn against them.”
In that case, China’s leadership will have the choice to either return to the seclusion of the Mao Zedong era or yield to the West’s pressure.
“Meanwhile, we have seen President Xi make moves to reinforce his political position and power internally, but this may not be enough to protect him in international sanctions on the Russian scale,” said Flint. “The central bank being sanctioned could prove extraordinarily dangerous for the PRC. However, China is so integrated into the global market – producing consumer goods for almost every market – those sanctions would exert massive pain on all China’s customers. However, the specter of sanctions, mixed with a motivated insurgency in Taiwan, would certainly give China reason to consider other options.”
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