Post
Topic
Board Economics
Re: The Geopolitical shock expected from the Russian invasion
by
be.open
on 26/05/2022, 17:58:46 UTC
How do you think China would respond to this crisis? your thoughts please.
China has made its impressive economic breakthrough on cheap coal. Then coal deposits in China began to run out and now China is the most energy-deficient country in the world. Western sanctions are pushing Russia to turn its back on Europe and divert more oil and coal to Asia, including China. If the sanctions last long enough to destroy the economic ties between Russia and Europe, China will become one of the main beneficiaries of this crisis.

China's economy isn't doing great at the moment. They're far from collapse but their economic growth appears to be slowing a bit.

They might look to Taiwan to ease any economic woes if they have them. Not that the Ukrainian war would have offered them any pause in their intentions to take Taiwan, but it certainly has reaffirmed their ambitions seeing the miserable response by most EU nations and the U.S. The only difference is that Taiwan is worth more to the U.S. than Ukraine. So if compelled, the U.S. might use military force to protect Taiwan in the event of an invasion (I'm still a bit doubtful thought).

China are the real winners here.
I am not a big fan of conspiracy theories, but looking at the lockdown in Shanghai due to the relatively harmless omicron, the thought creeps involuntarily that China's "zero tolerance" policy regarding covid-19 has as one of its goals to create an artificial break in supply chains, because Shanghai is the center of container shipping from China. In fact, China now supplies goods only by land, and sea freight is blocked by 80%. Both China itself and the whole world, which is used to receiving goods from China by sea, suffer from this. This can be regarded as an act of China's soft economic warfare in its confrontation with the West.