The camaraderie between Vladimir Putin and Xi Jinping has been in the news since September 2018 when they met at the Vladivostok so-called Eastern Economic Forum where Putin famously showed Xi how to cook blintzes while their tanks practiced maneuvers (see Autocrats Cook While Tanks Rumble, 9-18-18).
President Xi brought President Putin two pandas in a show of good will at the June 2019 economic forum in St. Petersburg as the two signed trade agreements, at least partially to avoid trade sanctions from the West. Xi called Putin his best friend as they celebrated Putin’s birthday (see The Two Pandas Summit: Autocrats Gather; Economies and Military Ties Strengthened, 6-11-19).
The pandemic interrupted bonhomie, but in a show of friendship and respect, Putin managed to slip into Beijing for some Olympic viewing (and napping) at a moment when he needed to show the U.S. and Western Europe he has a powerful friend in Asia (see Americans Dislike Putin, Support Ukraine, But Don’t Want War, 2-10-22). They have long made clear their hostility to Western democracies and the U.S.’s geopolitical and trade positions, which they label as unilateralism and hegemony.
Ukraine once again has our pivot to Asia on hold. Diverting Russian gas from Europe to China will make Chinese manufacturing cheaper and German manufacturing more expensive. Germany and China already have a huge trade relationship, which is approaching the level of importance of ours for both China and Germany.
ReplyDeleteSanctions cut both ways, and while they may punish Russia, they will also punish Europe. If we were to actually cut off Russia from SWIFT, European ability to pay for energy would end just as abruptly, and I assume so would Russian flows. Best case is that paper currency would start being used, and that will probably be in Euros, and mark the end of the Dollar as the main reserve currency. If the world stops using the Dollar, suddenly our deficits do mean something, and nothing particularly pleasant for Americans. It will make our current inflation problem seem trivial.