On Sunday reports emerged that Russia asked China for military and economic support for its war in Ukraine. Worse yet for the West, China reportedly seemed open to backing Russia.
The news kicked off an intense week of diplomacy and economic brinkmanship that culminated Friday in a nearly two-hour call between President Joe Biden and President Xi Jinping of China.
But, according to both sides, the big questions appear to remain unanswered.
An official White House summary of the meeting said the call focused on the invasion of Ukraine and that Biden “described the implications and consequences if China provides material support to Russia as it conducts brutal attacks against Ukrainian cities and civilians.”
But as for specific possible actions, Biden officials repeatedly withheld details: “We’re not in a place at this point to outline the specifics, we’re still discussing,” Press Secretary Jen Psaki told reporters Friday afternoon.
A Chinese summary of the call was similarly vague. The Chinese release took pains not to favor either side, calling for all “to jointly support Russia and Ukraine in having dialogue and negotiation that will produce results and lead to peace.”
David Shullman, Atlantic Council Global China Hub Senior Director, told Yahoo Finance on Friday that Biden had likely hoped to spur action from Xi towards either helping Ukraine or condemning Russia. But, he added, “Not surprisingly, that’s not what we seem to have had unfolded.”
China wants to position itself as a mediator but also sees Russia as its key partner, Shullman says. He added that it’s “become more and more obvious that China is not willing to engage in a good faith effort.”
‘Not something that we’re going to take sitting down’
Biden and Xi last met in November. As they sat down for that session, Xi called Biden “my old friend” — an apparent reference to the significant time the two spent together during the Obama administration.
This time the tone seemed changed and came after a week of heated rhetoric.
On Monday, National Security Adviser Jake Sullivan met with Politburo Member Yang Jiechi in Rome. “It was an intense seven-hour session reflecting the gravity of the moment,” a senior administration official said.
On Tuesday, Secretary of State Antony Blinken followed up on CNN about what happens if China begins to provide material support for Russia. “Without going into specifics of what we’ll do, we’ve made very clear that that’s not something that we’re going to take sitting down,” he said. He went further during a news conference on Thursday by saying if China were to take that step “we will not hesitate to impose costs,” while again not providing more details.
On Friday, just before Biden and Xi sat down, Deputy Secretary of State Wendy Sherman told MSNBC that Xi should tell Vladimir Putin to “end this war of choice.” However, Biden didn’t make specific demands of Xi during their call, according to a senior administration official.
“The president really wasn’t making specific requests of China,” the official said. “He was laying out his assessment of the situation.”
The call covered a range of topics, including Taiwan and competition between China and the U.S., according to both sides. Still, the White House said the “preponderance” of the conversation centered around Russia and Ukraine.
Economic back and forth
This week, the possibility of Western sanctions against China weighed on investors around the world. Fears that Chinese companies could face blowback for China’s sympathy toward Russia were likely a factor in a steep drop in Chinese stocks earlier in the week.
The Hang Seng China Enterprises Index, which tracks Chinese shares traded in Hong Kong, dropped early in the week before bouncing back in recent days. The gains also came after China’s top financial body said it would ensure stability in capital markets and take other market-friendly actions.
The economic turmoil seems to have led to hints from Beijing that suggest limits on its support for Russia. “China is not a party to the [Ukraine] crisis, and doesn’t want the sanctions to affect China,” Chinese Foreign Minister Wang Yi reportedly said during a phone call Tuesday with his Spanish counterpart.
Regardless of whether relations improve in the short term, Doubleline Global Bond Strategy Fund Portfolio Manager Bill Campbell told Yahoo Finance the long-term trends might not favor the U.S.
“We think that over time, the financial linkages, the geopolitical linkages, and the trade linkages between those two large economies and important players in global trade are only going to deepen,” he said.
Ben Werschkul is a writer and producer for Yahoo Finance in Washington, DC.
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