Date: 03/13/2023
Author: Mr. X
We’re moving closer to the end of the unipolar world that Russia is always talking about. We’re not there yet. Luckily, we know exactly what to look for.
Chinese President Xi Jinping is expected to visit Russia very soon. It may come as soon as next week. Given that Xi Jinping just secured an unprecedented third term at the National People’s Congress, it would be an indication that Moscow is at the top of the leader’s agenda for his new term.
The timing is significant because China just advanced its own peace plan for the war in Ukraine. Alexander Lukashenko’s Belarus, which served as a staging ground for the Russian invasion of Ukraine but hasn’t formally joined the war, supported the plan. The West has been skeptical.
The plan doesn’t offer much of a positive proposal. It calls for lifting sanctions, a cease fire and beginning negotiations that will respect the sovereignty of all countries. It also calls for supporting the export of grain from the Black Sea and securing nuclear power plants. It offers no guidance for possible territorial cessions from Ukraine or a referendum in the occupied territories. It also doesn’t mention Crimea, which Ukraine insists remains its territory and which Volodymyr Zelenskyy vows that Kyiv will reclaim.
It does state that “nuclear wars must not be fought.” This could be interpreted as a challenge to Russia, as Russia has consistently fallen back on its nuclear threat if Ukraine ever advances to Crimea. It is widely expected that Ukraine will launch a counteroffensive this spring with new Western weapons and personnel that have been training in other countries.
However, it’s currently Russia that is advancing near Bakhmut and the surrounding area, albeit with high casualties. Of course, one reason the casualties may be so high is because the Russian Ministry of Defense is deliberately weakening the Wagner Group, which has become a political threat to the conventional military. While Russia is expending manpower seemingly without concern, Ukraine is reportedly suffering problems gathering men for its own forces. President Zelenskyy’s decision to defend Bakhmut seems like it is inspired more by politics rather than military considerations. If the city falls, the blow to morale will be considerable.
Russia’s main problem is that it simply doesn’t have the material to keep the war going for the long term. It may have a manpower advantage over Ukraine, but it will not be able to continue the struggle unless it can replace all the heavy weaponry that has been destroyed thus far. China has refused to supply Russia with equipment and has been warned by the United States against doing it. Yet the United States is already openly forming a naval coalition against China in the Pacific with the United Kingdom and Australia, and it is lobbying the EU to be ready for sanctions if China decides to supply Russia. China may decide that sanctions are inevitable and go forward anyway. After all, it’s already cut off from semiconductors.
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China won’t be so bold as to openly supply Russia of course. It may be able to do it by sending equipment to Belarus, which can then supply it to Russia. China needs enough plausible deniability to lobby against sanctions. With domestic support for the war in Ukraine wavering in the United States, Beijing (and Moscow) may be counting on a collapse of Western resolve.
China and Russia are also looking with keen interest at what’s happening in the Middle East. China achieved a breathtaking diplomatic coup when it brokered an agreement between Saudi Arabia and the Islamic Republic of Iran, re-establishing relations between those powers.
During President Donald Trump’s Administration, the White House was able to build a considerable anti-Iranian coalition, rallying the Sunni powers to oppose Iran and providing massive backing even to the most controversial actions. President Joe Biden ran partially on the platform of freezing out Saudi Arabia and its supposedly authoritarian leader, Crown Prince Mohammed bin Salman. President Biden had to swallow his pride and go begging to Saudi Arabia when the Russian invasion jeopardized American oil supplies. Still, everyone noticed the rather toned down welcome American officials received compared to the triumphant fete that Xi Jinping got from the Kingdom.
The fact that Saudi Arabia is openly breaking from the American diplomatic orbit at a time when American energy supplies are jeopardized should be supremely concerning to Washington. Riyadh is also operating from a position of strength. Saudi oil company Aramco reported a record profit of $161.1 billion in 2022. CEO Amar Nasser expressed cautious optimism for 2023. He said that “we anticipate oil and gas will remain essential for the foreseeable future.”
The bank crisis is hitting America at a critical time. American hegemony is dollar hegemony – there’s no distinction between the two. Dollar hegemony is ultimately underpinned by military power and geopolitical credibility. China is on notice that it will be contained and forced to submit to the American system. While Russia has stumbled in its invasion, it hasn’t been crushed, despite sanctions. Losing Saudi Arabia is a massive blow to American credibility.
If China decides it can supply Russia with military hardware – probably through an intermediary – it will be a sign that the global order is facing a systematic challenge that it hasn’t seen since the end of the Cold War. If Xi Jinping visits Russia next week, surprising analysts, that will be a signal that may be considering such a radical move.
Mr. X is an investment analyst working in the Washington DC area who specializes in the intersection of business and public policy. After fifteen years working in politics, he writes on a classified basis for RogueInvesting.com to bring you news on what those with power are debating, planning, and doing.
