China, India Soften Blows to Russian Economy

Updated: Feb 27

On February 24, 2022, the People's Republic of China (PRC) lifted all importation restrictions on wheat from the Russian Federation (RU). The move coincided with the Republic of India's (IN) decision to remain muted on the Russian campaign in Ukraine. The actions taken, or lack thereof, by policymakers in Beijing and New Delhi run in direct opposition to those taken by other great and middle powers. The support given to policymakers in Moscow from these two states will significantly soften the coordinated geoeconomic response against the RU from the west in the short term.


Background

As November 2021 drew to a close, intelligence organizations from multiple North Atlantic Treaty Organization (NATO) member states loudly warned of a massive buildup of Russian Ground Force (RGF) units along the Russo-Ukrainian border. Specifically, they drew attention to installations across the Russian Federation’s Western Military District (WMD), where large amounts of armored vehicles, equipment, and ammunition stores seemed to be forward deployed. Over the course of the next three months, RGF elements continued to conduct exercises and increase their readiness near the border, leaving policymakers in the West with the belief Moscow intended to violate the sovereignty of Ukraine.


Russian President Vladimir Putin continually proclaimed during this buildup that American and NATO activity within Ukraine was threatening the national security of the Russian Federation. He drew specific attention to one facet of Russia's Strategic Troika: the need for a strategic buffer. This sentiment was echoed by individuals throughout the Russian government, media, and populous.


On February 24, 2022 at 0500 Eastern European Time (EET), the Russian Federation initiated hostilities with Ukraine in an attempt to establish a buffer zone by force. The Russian Air Force (RAF), Russian Navy (RN), and Russian Ground Force began the first phase of the operation by targeting Command, Control, Communications, Computers, Intelligence, Surveillance and Reconnaissance (C4ISR) facilities, airfields, ports, ground installations, and air defense platforms across the country. This initial blow was followed by a major land invasion of Ukraine. As of February 24, 2022 at 2200 EET, the Russian Federation has successfully established footholds in the North, East, and South of Ukraine, with RGF elements on the verge of taking Kyiv itself.



People's Republic of China

The People's Republic of China has publicly stated it hopes the conflict in Ukraine can be resolved diplomatically since the invitation of hostilities. On February 25, 2022, Chinese Foreign Minister Wang Yi declared that the PRC respects the sovereignty of all nations and that peace would benefit all parties. A major diplomatic leak from officials in the United States' Department of State (DOS), however, shows that the PRC was not interested in averting the conflict in the months leading up to February 24.


According to the New York Times, the United States Government held six meetings in three months with Chinese diplomats and emissaries in an attempt to prevent Russian action. US officials presented Foreign Minister Wang Yi, Chinese Ambassador to the US Cui Tiankai, and several other high-ranking Chinese diplomats with intelligence on the deployment of RGF formations around Ukraine. The United States repeatedly requested the Chinese pressure Moscow not to initiate hostilities with Ukraine. The People's Republic of China fiercely contested allegations that Russia was preparing to invade during these meetings. Following the last meeting, Chinese intelligence personnel forwarded the information to Moscow, while Chinese diplomats assured the Russian Federation that the PRC would not impede or interfere with any Russian actions.


On February 24, 2022, the PRC lifted all importation restrictions on wheat from the Russian Federation. The move not only relieves pressure on the Russian economy following harsh geoeconomic actions by the United States and its European partners, but signifies the growing Sino-Russian relationship in a new era of great power competition. As the world's largest producer of wheat, the Russian Federation is well situated to assist the PRC address the food security concerns that have plagued policymakers in Beijing for several months. The PRC and RU are expected to announce further measures to deepen their economic relationship over the course of the next three weeks.


Republic of India

Indian officials have refused to take action against the Russian Federation in response to the Russian aggression in Eastern Europe. Instead, India remains on the sidelines, with Prime Minister Narendra Modi simply requesting Russia pursue a policy of, "sincere dialogue." The continued access of the Russian Federation to India's market will help Moscow overcome the major geoeconomic campaign being waged by the United States and its European allies.


Indian reluctance to pressure Moscow is a result of its dependence on the Russian Federation for military equipment. Due to the country's volatile relationship with Pakistan, the Indian government is unwilling to jeopardize its largest source of modern military equipment. According to the Congressional Research Service (CRS), India made up 23% of Russia’s total arms exports. That 23% amounts to 49% of total Indian weapons procurement from 2016 to 2020.