Putin-Xi bromance not all roses
What does one make of the historic meeting this week between the Chinese and Russian presidents?
One thing I find a little lacking in the Western media, understandably, is what you might call a vituperative-free underpinning to reporting on the Russian invasion of Ukraine. Even I, as a critic and angry detractor, can see there are more reasons why Russia might invade Ukraine than I have read in Western media.
One obvious reason is historical. Russia has been invaded by a European power once a century, every century, for the past four centuries. Of course, this was all a long time ago. But on the most recent occasion, Russia lost at least 16 million of its citizens, and 15% of its entire population. You tend not to forget about such things quickly.
It should be noted that Russia has invaded at least one country in the West once a century since 1600. (1755 Germany; 1792 Poland; 1914 Germany; 1939 Finland, Romania and Poland). But none compares in scale to Operation Barbarossa, the 1941 German invasion of Russia. Whether you think it’s rational or paranoid, Russia’s commitment to having a secure western border is something to take
into account.
The second factor is geography. Tactically, Russia’s geographic priority on its western flank is to control the Eurasian steppe. This is the mostly flat piece of land that begins in Germany’s east and gradually widens out to the point where it is practically undefendable from a ground invasion – at least in summer, as the Germans and the French both found out to their huge cost.
There was once a choke point in the gradual expansion of the steppe between the Carpathians in the south and the Baltic Sea in the north. That line is roughly contiguous with the eastern border of Poland. After the collapse of the Soviet Union, Russia has seen country after country move closer to the West, to the extent that this choke point really doesn’t exist any more.
Should a Western ground attack occur, it would come through Georgia or Ukraine. This explains, in part, conflicts between Russia and Georgia and Ukraine.
If you recall how desperately (and viciously) the Russians put down the uprising in Chechnya in the 1990s, that was presumably motivated by the desire to keep pro-West governments south of the Carpathians. If you wonder why Belarus sides with Russia, the geographic answer is: were Ukraine to join Nato, Belarus would be surrounded on three sides by Nato states. Economics are at play, too. As we see, as the war progresses, the Russian and Chinese economies are extremely compatible; oil and gas (and water) China needs are available in high volumes from Russia, and tech and manufactured goods Russia needs are available from China. Bilateral trade hit a record of $190-billion in 2022. Oil, LNG and gas exports are up as Russia pivots away from Europe – and Europe closes the taps.
Other factors are at play, but these are a few of the most important background issues from Russia’s and China’s points of view. The question is, will the alliance between China and Russia last?
I think there are good reasons it won’t. Russia and China both want US global dominance clipped back. But their tactics are very different. I suspect China’s critique of Russia’s methodology in Ukraine is not about the war as such; it’s the way it’s being conducted and that it is lasting too long.
China’s tactic was to creep up on the US, economically and militarily, gradually consolidating its position and improving its technology over time. Very sensible, very Chinese. Russia’s actions in Ukraine will mean huge upgrades to US military tech, exactly what China does not want. You can imagine the joy in the boardrooms of Lockheed, Raytheon and Northrop Grumman at the arrival of a second Cold War. This is what the Ukraine war will be known for: resumption of belligerent nation-state competition.
China’s desire for peace in Ukraine is based on wanting to get back to its strategy. And if Russia is repelled it would complicate China’s desire to swallow Taiwan.
They don’t want the brethren across the strait getting big ideas.
The problem for Russia is that its junior role in the “friendship” will become more and more apparent. It already looks like a dependency and not a balanced alliance. For how long will Russia be happy with this?
I wonder if anyone in the Chinese administration would ever have the audacity to bring up the Treaty of Tientsin. This was one of the biggest of what China now considers “unequal treaties” in its history, which happened in what it calls the Century of Humiliation. The treaty, along with the Convention of Peking, formally gave Russia a huge slice of Outer Manchuria.
If the legal basis for Russia’s invasion of Ukraine vests in “historical rights” rather than legal treaties, wouldn’t the Chinese have the right to take back their territory?
Russia signed treaties recognising Ukraine’s borders, the 1997 Russia-Ukraine Friendship Treaty and the 1994 Budapest Memorandum, but it still grabbed bits of
Ukraine. Could the
Chinese do similar?
Xi and Putin say there is “no limit” to their friendship.
But there is.
Tim Cohen is editor of Business Maverick. from operations is expected to be between 30% and 35% lower.
Balwin: complexes in complex times
There’s good news and bad news when it comes to Balwin’s latest update. On the bright side, Heps for the year ended February 2023 is expected to increase by between 16% and 21%.
This is arguably where the happiness ends. The general outlook is a bit worrying, and so is the narrative. If the company had invested in a proper PR team earlier in its life, it wouldn’t be struggling as much with institutional investor confidence. A lack of confidence means a low valuation multiple.
For example, an acknowledgement that the company has a “slightly defensive strategy in the handover of apartments” to ensure that the “forward sales position remains robust” sounds a lot like revenue smoothing. When you note forward sales of 900 apartments versus 1,900 apartments at the same time last year, you can see why it is worried about the future.
Personally, I have as much interest in owning Balwin shares as I have in owning a buy-to-let apartment in this environment: none.