Sensemaker: Beijing backchannel

Long stories short

• Nazanin Zaghari-Ratcliffe has been released from custody in Iran and begun her journey home.
• Ukraine’s President Zelensky said there was “room for compromise” at peace talks as Russian officials spoke of a potential deal based on Ukrainian neutrality.
• 20,000 residents of Mariupol escaped the city by car as the city’s deputy mayor said 400 civilians were being held hostage in one of its hospitals.
• Maria Ovsyannikova was fined the equivalent of $280 but spared jail after displaying an anti-war placard on Russia’s main evening news on Monday.

Beijing backchannel

Russia urgently needs China’s help – as a supplier of weapons and a buyer of its energy. Could China use this leverage to end the war? It seems to think so.

A source close to the Chinese Communist Party (CCP) tells Tortoise the party’s leadership believes it could bring about an immediate ceasefire between Russian and Ukraine and host peace-talks between Russia, Ukraine, the USA and the EU. And there is confidence in the CCP that Xi Jinping could help deliver a peace deal that guaranteed Ukrainian sovereignty and assured Putin Ukraine would not become a member of Nato.

Other countries, notably Turkey and Israel, have offered to broker talks, and there would be conditions attached to any Chinese plan – conditions the US would be unlikely to accept (see below). That could help explain why talks between the US national security advisor and China’s top foreign policy official in Rome on Monday were so “intense” and went on for seven hours.

Even so, there are signs that China is trying to send a set of messages that aren’t getting through.

A timeline 

4 February. At the start of the Beijing Winter Olympics, 20 days before the invasion of Ukraine, Xi and Putin agree a “no limits” Sino-Russian friendship pact. Then and since, the CCP claims to be neutral on what it calls the “Ukraine crisis”. China continues to trade as usual with Russia, while also sending humanitarian aid to Ukraine.

8 March. Xi calls for “maximum restraint” and indicates in a meeting with German Chancellor Olaf Scholz that he would be willing to help mediate between Russia and Ukraine. 

14 March. On Monday this week US National Security advisor Jake Sullivan and his Chinese counterpart, Yang Jiechi, meet in Rome. Sullivan makes clear the US will sanction China if it supports Russia and there is little sign of progress after seven hours.

The readout: Chinese officials denied plans to send war materiel or aid to Russia but the US delegation left Rome fearing Chinese support for Putin was likely to continue or increase. 

To note, part 1: 

• Xi Jinping has one overarching goal this year – to secure his third term in office. In 2018 he revised China’s constitution to allow him to continue as party chairman indefinitely, but his second term ends in November and his extended stay at the top of the CCP needs to be managed carefully. He needs stability and to keep growth on target. The economy is slowing, the war is costing him, and he can’t afford to be further sanctioned by the US for supporting Putin.
• China’s economic relationship with Russia is worth a fraction of its trade with the EU and the US – by one estimate, a twenty-fifth. So if commerce were the only factor it would be clear where China’s interests lay. But…
• Xi has realised he can leverage his position as potential peacemaker. He wants to be incentivised rather than bullied or threatened. Our source says Xi wants the process to produce a more “friendly environment” for China. 

What might that mean? What inducements would get Xi to bring Putin to talks? Xi would like an end to China-bashing by the West. He’d like peace in the US-China trade-war (which Biden has so far ruled out). He’d like Sino-US relations to be normalised and US economic sanctions and trade tariffs on China to be reduced. He’d like less US naval activity in the Taiwan Strait. He’d like the EU to sign its pending comprehensive deal on investment with China. And when the UN High Commissioner visits Xinjiang in May this year, he’d like her to say that there’s no genocide taking place there. 

This is a version of how Beijing would like its dialogue with the West to be seen – a version western negotiators might not recognise, let alone accept. But it’s less confrontational than some competing views within China, including those of hawks inclined to double down on the “no limits” pact with military backing for Russia. 

To note, part 2:

• Xi feels aggrieved that Biden and other Western leaders boycotted the Winter Olympics. At the opening ceremony he sat, socially distanced, in the bleachers of Beijing’s Bird’s Nest stadium with Putin (falling asleep) for company.
• From Biden’s point of view the incarceration of a million Uighurs in Xinjiang and the crushing of democracy in Hong Kong made the boycott an easy call. From Xi’s point of view the West left him little choice but to turn towards Russia.
• He could now convene peace talks, but to make them happen the US and EU might have to give him something of what he wants instead of talking past each other.

---

CAPITAL ECONOMY, BUSINESS AND FINANCE

Raskin out
Biden’s pick to serve as vice president of the Federal Reserve withdrew her candidacy yesterday following what one leading Democrat called a “disingenuous smear campaign” by Republicans. Sarah Bloom Raskin, an experienced financial regulator, was top choice for the Fed job, but her view that banking regulators should pay more attention to climate risks raised the ire of Washington’s powerful fossil fuel lobby. Senate Republicans opposed her candidacy and Democrat Joe Manchin joined them in opposition, effectively killing it off. The New Yorker, not known for breaking news, had the scoop, and the spin: This “dooms the most powerful central bank in the world to a state of willful blindness regarding the looming chaos that scientists predict climate change will unleash,” it said. Not necessarily. Others on the board may understand the risks, but Bloom Raskin made the point that outside the US her view that banks need to take climate risk seriously is mainstream, not fringe. 

---

CULTURE soCIETY, IDENTITY AND BELONGING

Russian rule reality
A central question raised by the invasion of Ukraine is what occupying forces might do there. The answer, so far, is nothing good – and nothing much. Russian troops have abducted the mayors of Melitopol and now Dniprorudne in the south. They have looted shops and terrorised some civilians while sparing others by shooting into the air rather than at them when trying to disperse crowds. But there has been little interest in governance. Kherson was briefly an exception. The FT reports on an attempt to set up a Kherson People’s Republic similar to those backed by Russia in Luhansk and Donetsk in the east. It fizzled. “We voted against,” the mayor said. Score one for democracy. 

---

TECHNOLOGY AI, SCIENCE AND NEW THINGS

Intel in Europe
One of the world’s biggest chip-makers is to spend $36 billion on new factories and R & D facilities in Germany, France, Poland, Ireland, Italy and Spain. Intel tells the WSJ the reason for the investment is to keep pace with surging global demand. It’s also a reset: Intel and other US firms were left in the dust by technological advances in Taiwan (the Taiwan Semiconductor Manufacturing Company) and South Korea (Samsung) – and were then left in the lurch when Covid-related supply bottlenecks meant they couldn’t even buy chips from their Asian rivals. Magdeburg, in old East Germany, gets the lion’s share of the initial Intel investment. 

---

The 100-year life health, education AND GOVERNMENT

NHS backlog
The Royal College of Psychiatrists is ringing alarm bells (again) about the rising number of people in contact with mental health services. Analysis of the most recent NHS Digital data shows 4.4 million referrals in 2021 for adults and children in England. Particularly worrying is a 15 per cent year-on-year rise in contacts with under 18s. Serious concerns for those needing surgery and cancer care were also raised by the public accounts committee (PAC) yesterday. 6.1 million people are on that waiting list. What could help? The big three: staff, capacity and funding. The national insurance increase due on 1 April is supposed to address at least one of those by pumping an extra £12 billion into social care and NHS England – but Dame Meg Hillier of the cross-party PAC says without a meaningful plan to expand the workforce and increase capacity it’s likely to prove an empty promise. 

Our planet CLIMATE AND geopolitics

Fewer hurricanes
Global warming means warmer oceans, means they store more energy, means more and more powerful hurricanes when that energy is released. Right? Not exactly. A new study in Geophysical Research Letters counted hurricanes and measured “accumulated cyclone energy” between 1990 and 2021 and found fewer of the former and less of the latter than there used to be. The study also found that increased coastal property damage in the same period is more a function of there being more property to damage, than of the weather. Does this mean a rethink of received wisdom on climate change and hurricanes is needed? Not necessarily. The decrease in the number of really big storms is more marked in the western Pacific, where it’s linked more closely to the La Niña effect than to global ocean temperatures, than in the Atlantic, where there are as many hurricanes as ever. Note to insurers: the number of smaller, short-lived but still named storms is up in both oceans. 

Thanks for reading and do share this around.

Poppy Sebag-Montefiore
@poppysm

Photographs Getty Images

---

Russia-Ukraine: Whose side is China on?

President Xi Jinping has said his friendship with Vladimir Putin has “no limits”. So what does he make of Russia’s invasion of Ukraine?