Beijing bets on shuttle diplomacy to boost its economy

(Written by Junhua Zhang. Originally published here in GIS Reports, republished with permission.)

In a nutshell:

• China’s close ties to Russia prevent it from being a credible mediator in the Ukraine war
• Beijing appears to be making a second attempt at peacemaking to court the West
• These endeavors may not prove convincing to Western countries

Observers familiar with Chinese President Xi Jinping’s governance style have grown used to his sudden shifts in policy. During the pandemic, he was a vocal advocate of zero-Covid measures, presenting the approach as evidence of socialist success. However, he quickly reversed course upon realizing the domestic economy was on the edge of collapse. A similar pattern is now emerging in his diplomatic strategy.

Last spring, the Chinese Communist Party (CCP) proclaimed its ambition to act as a peacemaker in the Russia-Ukraine conflict, expressing a willingness to play the role of neutral mediator. Yet, many in Europe still hope that China might use its leverage to pressure President Vladimir Putin. However, the close ideological bond between President Xi and the Russian leader complicates this stance. Both the European Union and Ukraine believe that Mr. Xi’s ties to the Russian president mean that it is not possible for him to remain unbiased. Meanwhile, the Kremlin expects Beijing to behave as an ally, and reacts with displeasure at even the slightest hint of neutrality on the global stage.

Last year, in an attempt to demonstrate its neutrality, China’s state-owned Phoenix TV station dispatched a special correspondent to the Ukrainian front. She published a series of reports largely based on her interviews with Ukrainian soldiers, highlighting their resolve to resist. Additionally, a visit to Kyiv by a Chinese envoy appeared to unsettle President Putin, as this development seemed out of step with both Russia’s expectations and President Xi’s initial plans.

Subsequently, Mr. Xi’s “shuttle diplomacy” – when one party shuttles between two negotiating parties who are unwilling to talk – came to a sudden halt. Since then, Beijing has adopted a more decisive stance on the conflict in Ukraine, steadfastly aligning with Mr. Putin. Beijing has declared its refusal to engage in peace negotiations spearheaded by the West, labeled its alliance with Russia a “strategic partnership,” and bolstered cooperation in areas of trade, security and finance.

Sudden changes for the sake of the economy

However, China’s economy has not been performing well, and Russia alone cannot keep it afloat; rather, it is Western capital, markets and technology that could rescue it. Aware of the West’s predicament due to the conflict in Ukraine, President Xi unexpectedly announced the renewal of last year’s peace envoy initiatives.

Li Hui, the Chinese government’s special representative for Eurasian affairs, visited Russia, Ukraine and some European Union countries in early March. This visit marks the initiation of a second attempt at shuttle diplomacy aimed at facilitating a political resolution to the Ukraine crisis.

President Xi, drawing from previous experiences, took precautionary steps before launching the second iteration of his shuttle diplomacy. He tasked Vice Foreign Minister Sun Weidong with meeting Russian Foreign Minister Sergei Lavrov and other officials in Moscow on February 27. Representing President Xi, Mr. Sun underscored the unparalleled strength of China-Russia relations and reiterated China’s unwavering support for Russia, setting the groundwork for President Putin’s upcoming visit to Beijing.

China’s new attempt at mediation

This recent initiative is a component of China’s broader strategy to enhance its diplomatic relations, especially with Western nations. Over the past two months, Chinese Foreign Minister Wang Yi has been actively engaging with European leaders, including his German and French counterparts, advocating for stronger ties with the EU. Xi Jinping’s recent visit to Europe also aimed to boost economic ties. Beijing tried to demonstrate that misunderstandings or disagreements between China and Europe can be overcome, regardless of its support for Russia.

Despite the CCP’s resentment toward the Biden administration, Beijing has occasionally demonstrated a notable level of enthusiasm toward the United States. President Xi announced last November that China plans to invite 50,000 American teenagers to study in China over the next five years.

In addition, Chinese officials have revived their “panda diplomacy” initiative through the China Wildlife Conservation Society. Not only did they sign a cooperation agreement with the Madrid Zoo but they have also formed a partnership with the San Diego Zoo, and are in talks with the Washington National Zoo and the Schonbrunn Zoo.

Beijing is cautious of potential U.S. and EU sanctions targeting Chinese financial institutions. A Zhejiang-based bank ceased its transactions with Russia toward the end of last year, a move that was followed by China’s three largest state-owned banks. (However, both Beijing and Moscow are discussing potential alternative pathways.)

The primary aim behind President Xi’s about-face is the revitalization of China’s economy. Presenting itself as a mediator for peace to the West not only helps China improve its market reach in these regions but also secures the goodwill of Western investors. At the same time, Chinese authorities often publicly state positions that, in practice, are the exact opposite of their actions. This is especially true regarding their support for Russia.

Europe’s reaction

Whether or not Europe buys this narrative is another matter. Of course, neither the U.S. nor the EU are willing to completely turn their backs on Beijing. The EU waited until Foreign Minister Wang had finished his European tour before announcing new sanctions that included Chinese companies for the first time. This is the 13th round of EU sanctions since the outbreak of the Russia-Ukraine war, with nearly 200 companies and individuals included in the list, among them three mainland Chinese companies and one registered in Hong Kong.

Beijing seems to believe that positive rhetoric towards the West, particularly Europe, can overshadow the scars left by the Ukraine conflict, allowing for a return to business as usual. President Xi’s administration hopes to maintain its advantageous position with both sides – supporting Russia while still exporting its products to Europe. Nevertheless, during his recent stay in Paris, President Xi sensed that many EU member states resent China because of its support for Russia.

Over the course of the two-year conflict, the West has become skeptical of Beijing’s reassurances. For instance, despite Chinese officials asserting that Sino-Russian collaboration does not target any third parties, the Group of Seven (G7) convened in an online video conference and issued a joint statement in which they directly accused China of “transferring dual-use materials and components for military production of weapons and equipment from its enterprises to Russia.” However, the West does not seem to have effective tools to make Beijing shift its stance.

Different rhetoric toward Ukraine

Beijing understands the need to position itself strategically with respect to Ukraine. Moving away from the stance it took at the Davos summit in January, where Chinese Premier Li Qiang notably snubbed Ukrainian President Volodymyr Zelenskiy, Foreign Minister Wang met with his Ukrainian counterpart. He refrained from affirming China’s support for Ukraine’s sovereignty and territorial integrity, but emphasized that “we have not sent any lethal weapons to Russia.” Xi Jinping reiterated this during his meeting with French President Emmanuel Macron in May.

The Chinese authorities apparently assume that Ukrainians and other Europeans will overlook China’s role in sending chips, drones and countless dual-use devices to Russia for its war effort. It is Beijing that has prevented the Russian economy from collapsing.

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Beijing has consistently refrained from engaging in any peace negotiation efforts initiated by Kyiv or Western countries, despite Ukraine’s desperate need for such dialogue. Instead, Beijing has offered only symbolic gestures, like stating its willingness to contribute to Ukraine’s reconstruction.

With the upcoming peace summit organized by Switzerland, the situation appears somewhat different: Beijing has collaborated with Russia beforehand, suggesting that it will likely accept the invitation from the organizers, while ensuring that its participation does not jeopardize Russia’s interests.

Furthermore, recent developments on the battlefield in Ukraine have significantly strengthened the stance of China’s pro-Russia faction. In Chinese media, much like in Russian outlets, Russia’s victory in the war is portrayed as inevitable.

Russia is far from being a true ally of China

A recently disclosed set of Russian military documents (29 dossiers created between 2008 and 2014) show China as a potential target for Russian nuclear strikes – a plan formulated under President Putin’s regime.

Despite a joint declaration with China explicitly opposing the proliferation of nuclear weapons to third countries, the Kremlin has deployed nuclear missiles to Belarus. These actions underscore that President Putin’s attempt to earn China’s support amid global isolation is purely opportunistic.

Scenarios

More likely: China’s second attempt at shuttle diplomacy does not advance the peace process

China has the potential to act as a mediator in the Ukraine conflict. But instead, Beijing chooses to try to extract advantages from both Russia and the West simultaneously. President Xi’s reluctance to demand even minimal concessions from President Putin severely impedes his ability to earn the West’s trust. It is therefore unlikely that President Xi’s renewed attempt at shuttle diplomacy will succeed.

Less likely: President Xi negotiates concessions from the Russian side

Under the less likely scenario, growing war fatigue and resistance from both Russian elites and the Russian population leads President Putin to signal to President Xi that Russia is open to negotiating peace with certain concessions.

This scenario would only become feasible if Ukraine were to achieve rapid and significant military successes, reclaiming extensive territories and inflicting major losses on the Russian military. However, given the current shortage of manpower and ammunition, such an outcome seems unlikely to be achieved.