What China Should Learn from Russia’s Ukraine Adventure

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A prevalent strain of Western commentary suggests that Russian President Vladimir Putin is outfoxing a hapless and disunited West. If one evaluates the current round of Russia’s revanchist campaign — beginning with its annexation of Crimea — on its persistence in face of Western pressure, it has indeed been a success. Many observers fear, accordingly, that Russia’s effort will embolden China to act more aggressively in settling its territorial disputes, particularly in the maritime arena. It seems more likely, however, that China has learned a different set of lessons from Russia’s conflict with Ukraine, lessons that will compel it to double down on its strategy of persistent incrementalism and perhaps take even greater care to avoid a conflagration.

About a month before Russia annexed Crimea, Financial Times correspondent Geoff Dyer ventured that the United States and its allies in the Asia-Pacific could

develop defensive arrangements that take advantage of the region’s geography and which would make it almost impossible for China to seize contested areas—and to hold on to those islands if it were to try.

He continued: “By making clear the high penalties that would be involved in any attempt to snatch disputed islands, it can ensure that China cannot change the region’s status quo.” Given how significantly Russia has undermined its own national interests in recent months, those “high penalties” likely seem less hypothetical to China now.

Begin with the economic costs. The Russian Central Bank estimates that Russia will suffer nearly $100 billion of capital outflows this year, the highest figure since the onset of the global financial crisis. Former Russian Finance Minister Alexei Kudrin believes capital outflows could be even higher. Russia’s currency, the ruble, has fallen by 16% against the dollar this year, and economic growth is projected to be a meager 0.4%. Compounding Russia’s economic woes, the United States has recently imposed sanctions that prevent U.S. companies from “exporting goods, services, or technology to support five Russian energy companies in exploration or production for Russian deepwater, Arctic offshore, or shale projects that have the potential to produce oil.” Europe is also increasingly interested in reducing its dependence on Russian gas.

The ostensible fruits of Russia’s efforts, moreover, are likelier to prove burdens. Russian officials estimate the government will have to invest $18 billion in Crimea to “build infrastructure connecting it to the Russian mainland and bring its economy up to par with [those of] neighboring regions.” While Putin might stoke nationalist fervor further by hiving off the embroiled Ukrainian provinces of Donetsk and Luhansk, they are arguably in even worse condition than Crimea. Leaving aside the immediate effects of Russia’s incursions, both provinces received considerable subsidies from Kiev. According to Carol Saivetz, a research affiliate with MIT’s Security Studies Program, Russia would presumably have to fill that vacuum, not to mention provision of billions of dollars in reconstruction costs.

The costs of Russia’s undertaking are not only economic. It has given NATO a renewed sense of purpose as well as a pretext for expanding the organization’s membership and impinging further on Russia’s western borders. As I argued in the Wall Street Journal’s Asian edition earlier this year, it has also given China greater leverage in their already asymmetric relationship (what Bobo Lo calls a “neocolonial economic relationship”). A Russia that is further isolated from the West and weaker economically will be less capable of resisting Chinese settlement of its Far East and greater Chinese penetration of Central Asia. A declining Russia will also feel greater pressure to sell gas and weapons systems to China on China’s terms.

On balance, then, Russia has done considerable damage to its national interests. What lessons might its campaign hold for other countries? For declining or marginal players in the international system, the takeaway is encouraging: If one is prepared to incur significant costs — economic, diplomatic, and otherwise — to pursue a disruptive course of action, even extraordinary external pressure (short of military intervention) may not be able to stop one from proceeding. Consider North Korea, which has developed its nuclear program for roughly two decades despite being one of the world’s most isolated and impoverished countries.

Rising powers, however, are likely to pay more attention to the costs of pursuing policies that openly challenge regional orders and global order. Consider China, which is embroiled in several territorial disputes. True, it is far more capable of withstanding economic downturns than Russia, and unlike those Russia covets, many of the territories China claims are uninhabited features. Still, the consequences Russia has suffered this year have surely made China more sensitive to the risks it would take were it to attempt to assert its claims through force. Even if the United States were unwilling to intervene militarily should China seize, say, the Senkakus, the Spratlys, or the Scarborough Shoal, it has proven it can marshal a broad-based international sanctions regime, one that could do serious harm to China’s trade-based economy. China would also be more vulnerable than Russia to trade and energy disruptions.

Given the current and projected importance of the Asia-Pacific to the global economy, though, a U.S. president might well be more inclined to mull a military intervention, especially if the national interests of treaty allies such as Japan or the Philippines were at stake. In his new book, former BBC correspondent Bill Hayton concludes,

There is little doubt, in the minds of China’s military leadership, that if the country were to fight the United States in the next decade or two its armed forces would be humiliated and its economy blockaded and strangled.

Such a confrontation would likely compound China’s isolation in the Asia-Pacific, accelerate the campaigns of military modernization underway in many of its neighbors, and make the region further receptive to an enduring U.S. presence. Finally, it would undermine further China’s claim that it seeks to achieve a “peaceful rise” in its backyard.

Russia’s experience suggests that China’s current strategy for settling its maritime disputes — relying on economic pressure and low-grade changes to the regional status quo — while fraught with complexity, is likely to prove more effective than one that relies on aggression. The more dependent it makes its rival claimants’ economies on its own, the more likely it will be able to secure their acquiescence to its terms without using force. Meanwhile, to hedge against the possibility that a U.N. Convention on the Law of the Sea tribunal might find its maritime claims to be illegal, China is increasing its footprint on the aforementioned rocks and islands. A recent BBC report notes, for example, that while “the Chinese presence in the Spratly Islands [until recently] consisted of … a collection of concrete blockhouses perched atop coral atolls,” China is now “building substantial new islands on five different reefs.” It further asserts that China aims to build “a string of island bases and an unsinkable aircraft carrier, right in the middle of the South China Sea.” It is considerably more difficult to mobilize opposition to an “invasion” when the invaders are inanimate, unarmed objects.

Russia’s challenge to global order is both more overt and less skillful than the one China poses. While Western media often depict Putin as a kind of geopolitical grand master, the campaign over which he is presiding is undermining his oft-stated objective of establishing a Eurasian union. It is likely to reinforce China’s judgment that calculated assertiveness offers a safer route to achieving national interests than military adventurism.

Ali Wyne is a regular contributor to War on the Rocks, a contributing analyst at Wikistrat, and a coauthor of Lee Kuan Yew: The Grand Master’s Insights on China, the United States, and the World (2013).

Photo credit: schmeeve