The Ukraine crisis may put at risk investments planned for the country by businesses in China, Kiev's biggest trading partner, besides Beijing's Belt and Road Initiative (BRI) projects in Ukraine and the defence partnership between the two nations.
If there is either change of guard in Ukraine or the conflict prolongs, a three-year-old deal by Chinese networking giant Huawei to install 4G wireless services in the Kyiv metro system will go on hold, and massive agricultural shipments to China will slow down, ET has learnt. Ukraine is also a key element in China's BRI plans in Europe and Eurasia and Beijing may need to do some fine balancing, people aware of the matter told ET.
Besides, China may not want to offend its European partners to the extent that they play the Taiwan card against China and join the anti-China block with the US, considering that the EU is the second largest trading partner for China, according to one of the persons cited earlier.
Chinese President Xi Jinping is still hedging the bet and would calculate his move based on sanctions imposed on Russia by the West, according to a China watcher. Simultaneously, China is keeping a close eye on the US' response to the Ukraine crisis in case it wants to escalate tensions in Taiwan Straits or the South China Sea region.
A research paper published by Chris Miller, assistant director at Foreign Policy Research Institute, argues that China is keeping a close eye on the United States' response to Ukraine, as it will also map out the US' capabilities and mode of response if a similar incident happens in the Taiwan Strait or South China Sea. China became Ukraine's biggest trading partner in 2019. While Ukraine's defence ties with Pakistan, including sales of tanks to the Pakistan
Army, have been detrimental to India's security interests, Ukraine-China defence partnership is also under the scanner, sources pointed out.Russia and Ukraine defence trade began with the delivery of China's first aircraft carrier in the late 1990s. China has also sourced fighter aircraft engines from Ukraine, sources claimed. Beijing has also sourced nuclear reactor parts from Ukraine.
While China will study the implications of US sanctions on Russia, Beijing is also a beneficiary in the situation, as the US' strategic focus has moved slightly from China to Russia. This could be a security challenge for India which fears that a Europe-focused US can ultimately dilute its interest in the Indo-Pacific region, sources here pointed out. Previously, India has shared its view with the US that side-lining Moscow has pushed them into a closer partnership with Beijing.
Although China's official statements on the Russia-Ukraine conflict appear to be neutral, comments made by Chinese leaders, such as Chinese foreign minister Wang Yi's statement that "Russia's security concerns are legitimate" and the remark of Chinese ambassador to UN, Zhang Zun, that China does not agree on US' claim that Russia is threatening international peace, would contribute to Beijing-Moscow partnership against the US.
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