The Toxic Nexus

America’s deepening proxy conflict with Moscow, in response to Russia’s war of aggression in Ukraine, is not going well for US strategic objectives or interests. This international crisis has been bad news for virtually every country other than China, which is emerging as the sole winner, including by strengthening itself at America’s expense. The US is set to accelerate its relative decline by inadvertently aiding the faster rise of its main challenger, China.

US President Joe Biden’s “hybrid war” strategy, which has included weaponisation of global finance, has failed to trigger Russian President Vladimir Putin’s downfall or turn the rouble into “rubble”, as Biden vowed in the early stages of the war. The unprecedented US-led sanctions have failed to even weaken Russia militarily or economically, or change the Kremlin’s behaviour. If anything, Russia has pivoted to a war economy, expanding its missile production beyond pre-war levels and manufacturing almost three times more munitions than NATO’s collective production capacity.

By subordinating its economy to its security needs and by making military advances in Ukraine, Russia is emerging from the current conflict as a bigger threat to the West. And Putin appears more determined than ever to upend the US-led global order and hasten the relative decline of the West. As the US European Command’s General Christopher Cavoli recently acknowledged, “We will have a big Russia problem for years to come.”

More fundamentally, the biggest beneficiary of Biden’s approach is America’s main strategic adversary, China. At the global level, the US has only one challenger—China, which dwarfs Russia in economic power and military spending.

Furthermore, while Russia’s revanchist ambitions are largely confined to what it calls the “Near Abroad”, or the former Soviet space, China genuinely seeks to supplant the US as the preeminent global power. Biden’s own national security strategy acknowledged in 2022 that the US is worried about Beijing’s “revisionist foreign policy” because China is “the only country with both the intent to reshape the international order and, increasingly, the economic, diplomatic, military and technological power to advance that objective.” The subsequently released US National Defense Strategy bluntly stated that China represents “the most comprehensive and serious challenge to US national security.”

The plain fact is that China outshines Russia in capability and power. In comparison to Russia, China’s economy is almost ten times larger and its military expenditure around four times greater. Also, China’s population is about ten times bigger than Russia’s.

Simply put, a globally expansionist China is a far bigger threat to Western hegemony than Russia. China is powerful enough to pursue a sweeping vision to reshape the world by ending the era of Western dominance. Yet, at its own peril, the West remains focused on the wrong enemy.

It was known from the outset that no country would profit more than China from the Russian invasion of Ukraine and the ensuing Western sanctions.

Less than three weeks after Russia launched its aggression, Ukrainian President Volodymyr Zelensky’s economic adviser, Oleg Ustenko, declared that China is the only winner from the war, positioning itself to secure greater supplies of cheap Russian energy and serve as a “connector between Russia and the rest of the world”. Echoing this, a report by the Washington-based Free Russia Foundation said last year that China has emerged as the “biggest winner” from the Western sanctions on Russia.

Biden, however, has yet to face up to these geostrategic realities. Revenge has been guiding Biden’s Russia policy. Such has been the overriding focus on punishing Moscow for its invasion of Ukraine—a country of no vital importance to American security or prosperity—that it has trumped the pursuit of long-term US interests.

It appears that Biden has learned little from his extraordinary Afghanistan debacle. By getting into a deepening confrontation with Russia, Biden is deflecting US attention from the China challenge, thereby creating greater space for the accelerated rise of that communist giant.

Indeed, a single narrative since 2022 has driven American discourse and policy on the Ukraine war, making it easier to confuse tactics for strategy or for the administration to blunder. Only more recently have calls emerged from some American scholars for the US to redefine success in Ukraine and seek a long-term ceasefire.

While some in the West believe that a negotiated ceasefire in Ukraine would embolden China to attack Taiwan, Xi does not need Russia to show him that aggression works. China’s own cost-free expansionism, from the South China Sea to the Himalayas, is all the proof he needs. As a RAND report pointed out last year, a protracted Ukraine war is not in America’s interest because, among other things, it would hinder the ability of the US to respond to the China challenge.

As for Russia, it may have occupied almost one-fifth of Ukraine’s territory but it has reinvigorated NATO, which has expanded to include Finland and Sweden. Many of the unparalleled sanctions the West has imposed on Russia will likely endure beyond the war, ensuring that Moscow’s relationship with Beijing will remain important in Russia’s strategic calculus. So, like the US, Russia is contributing to China’s increased international leverage.

A Potential Pan-Eurasian Colossus

One key factor, which usually receives little international attention, is the role American sanctions are playing in sharpening and shaping great-power rivalries in ways that, far from advancing US interests, are counterproductive to America in terms of the geopolitical effects. Nothing better illustrates this than the burgeoning Sino-Russian partnership.

Under Biden, the US has gone beyond the traditional tools of deterrence and diplomacy by relying entirely on unprecedented sanctions to shape the behaviour of Russia, which has a historical record of enduring economic hardship. The sanctions, by pushing Moscow closer to Beijing, are fostering Sino-Russian strategic collaboration that is inimical to Western interests.

The sanctions against Moscow are helping China build an energy safety net through greater land-based imports from Russia that cannot be disrupted or blockaded even if China decided to invade Taiwan.

Sanctions are a favourite and grossly overused tool of American diplomacy. Even when they work against weak, vulnerable states, sanctions take a long time to have a tangible impact. Washington seems to have fallen into a trap of viewing sanctions as the easy answer to any problem.

Yet the truth is that US-led sanctions have failed to change the behaviour of the targeted states, including North Korea, Myanmar, Iran, Cuba, Syria, and Venezuela. Iran and North Korea, in fact, have made major advances in their nuclear, missile and drone programmes while facing harsh US-led sanctions.

More importantly, US sanctions against other countries almost invariably help to advance the commercial and strategic interests of China. For example, thanks to US sanctions against Iran, China not only has become the almost exclusive buyer of Iranian oil at a hefty discount, but also has emerged as the top investor in—and security partner of—Iran. US sanctions are similarly pushing resource-rich Myanmar into China’s arms.

Western overuse of sanctions bolsters China’s global influence, besides helping it to accumulate greater economic and military power. Not surprisingly, America’s relative decline is becoming more noticeable.

Russia is just the latest example of the counterproductive use of sanctions. Indeed, by turning Russia into the world’s most-sanctioned country, the US and its allies have delivered one of the biggest gifts ever to Beijing.

The failure to tame Russia through sanctions has become all the more conspicuous given the scale and range of punitive actions that the West unleashed under American leadership. In March 2022, Biden boasted that “economic sanctions are a new kind of economic statecraft with the power to inflict damage that rivals military might. These international sanctions are sapping Russian strength, its ability to replenish its military, and its ability to project power.”

To compel Russia to default on its sovereign debt, the US in April 2022 blocked Moscow from using its dollars held in American banks. Central bank assets historically have been considered sacrosanct. By freezing much of Moscow’s $643 billion foreign currency reserves, the West effectively declared financial war on Russia.

The weaponisation of the US dollar and other Western currencies to punish an adversary has served as a wake-up call for important non-Western economies. Pursuit of ‘de-dollarisation’ is most noticeable today in oil markets. Some economies are also hoarding gold. Rising gold purchases by central banks in China, Turkey, India, Kazakhstan and Eastern Europe, coupled with greater geopolitical uncertainty, have helped drive gold prices to a record high.

As for China, its central position in the global economy might well explain why the country has faced no meaningful Western sanctions for maintaining its Muslim gulag in Xinjiang or for snuffing out Hong Kong’s autonomy. Its expansionism in the South China Sea, which has turned it into its new citadel, has also been cost-free.

Meanwhile, the ineffectiveness of US-led sanctions against Russia can only embolden China. If unprecedented Western sanctions cannot bring down Russia’s economy, they certainly cannot destroy the much larger Chinese economy.

By driving Russia, the world’s richest country in natural resources, closer to Beijing, Western sanctions against Moscow are yielding major dividends for a resource-hungry China. In return for providing a lifeline to the sanctions-stricken Russian economy, China has gained access to some of Russia’s most advanced military technologies, including air defence and early-warning systems, which previously Moscow had sold only to India.

China has effectively become Russia’s banker and most important trade partner. Sino-Russian trade soared to $240 billion last year from $108 billion in 2020.

As China secures greater supplies of Russian oil, gas and grains through the secure overland routes, its energy and food worries in the event of a war with the West are easing. China is frenetically seeking to build energy security in advance of a possible attack on Taiwan.

During his recent visit to China, Putin claimed that the two countries are looking to further boost oil and gas trade. Beijing, however, is seeking to avoid over-reliance on Russia because that could arm Moscow with considerable leverage against it. To limit its vulnerability, China continues to tap other sources of energy supply, from the Middle East to even the US.

While quietly deepening its financial, economic and energy ties with Russia, China remains wary of inviting US sanctions on its banks and firms. Despite the fast-rising Chinese trade with Russia, exports to the West remain vital to China’s economic growth. So, after the Biden administration earlier this year warned Beijing of “significant consequences”, some banks in China have stopped international payments and servicing accounts of Russian corporate clients.

Biden, however, has sought in vain to dissuade Xi from strengthening China’s “no limits” partnership with Russia. If Beijing can leverage its partnership with Moscow to blunt US pressure, why would Xi turn his back on Putin? Xi’s “Chinese dream”, after all, is about making China the world’s predominant power by ending the era of American pre-eminence.

Had Biden worked to dissuade Russia from ganging up with China against the US, he might have had some success, especially if the effort also involved an easing of the US-led hybrid war against Moscow. Putin has always been open to closer engagement with the West. He has embraced China because the West has left him with no choice.

Biden, while keeping the door to diplomacy with Russia shut, has been beseeching China to stabilise the Sino-American relationship. But the more the US has deepened its involvement in the Ukraine war, the more Biden has sought to appease China in the hope of forestalling a Sino-Russian axis against America.

With Biden’s poll numbers at home getting worse, he recently unveiled new tariffs on Chinese goods to help boost his re-election prospects. Staggered to take effect from 2024 to 2026, the new tariffs will apply to just $18 billion worth of goods from China. (US goods imports from China totalled $427.2 billion last year.) The Trump presidency-era tariffs already affect around $226 billion worth of imports from China.

For China, Russia has emerged as a critical counterweight to their common rival, the US. Closer ties with Moscow help strengthen Xi’s multipolar global vision, even as the Chinese leader seeks a unipolar Asia. And with Putin, Xi shares the vision of ending Western dominance by helping establish an alternative world order.

A boon for China has been Biden’s Russia policy. With Beijing and Moscow endorsing a de-dollarisation agenda, China is expanding the international use of the Chinese renminbi currency, including in trade with Russia. Much of Russia’s international export earnings now are in the Chinese currency, with the earnings largely kept in China.

Faced with the US challenge, China does not see a weakened Russia as being in its interest. Beijing may like to be the senior partner in the relationship with Moscow but that does not mean it supports the US objective of degrading Russia’s military and economic capabilities.

Russia, for its part, values its closer partnership with Beijing but is unlikely to accept China as a senior partner. One reminder of this is the way Putin, to Xi’s chagrin, has co-opted China’s estranged ally, North Korea. Xi would have liked to broker Putin’s outreach to Kim Jong-Un. But in forging a new partnership with North Korea, Putin intentionally bypassed Beijing. By co-opting Pyongyang, Putin has sought to reshape Northeast Asian geopolitics and secure supplies of additional munitions for the Ukraine war.

At the same time, a mutually beneficial partnership between Russia and China is helping to advance a natural division of strategic priorities. While Russia’s attention is largely concentrated on regaining influence among states bordering its western flank, China’s near-term strategic priorities are primarily aimed at establishing hegemony along the arc stretching from Japan and Taiwan across Southeast Asia to India.

China and Russia, meanwhile, seem to be providing cover to each other’s expansionism. While Russia has publicly endorsed its support for China over Taiwan, including during Putin’s recent Beijing visit, China, without mentioning the Ukraine war, has backed Russia’s efforts to ensure its “sovereignty and territorial integrity” and said it opposes “outside interference in Russia’s internal affairs”.

The critical references to the US in the May 16 joint communiqué released at the end of Putin’s China visit underscore how Biden’s foreign policy has helped promote a potential pan-Eurasian colossus. Biden set out to bring about economic collapse and regime change in Russia but his policy is further overstretching America by helping to cement a Russian-Chinese partnership.

The strengthening Sino-Russian ties indicate that a fundamental global geopolitical and geo-economic reordering now appears all but inevitable. Trade, investment and energy flows internationally are already changing in ways that suggest that the global economy may be split into rival blocs. For example, China now trades more with the Global South than with the West. China, seeking to reduce its vulnerability to future Western pressure, has been quietly decoupling sections of its economy from the West.

On the Geopolitical Back Foot

If China and Russia are more firmly aligned now than at any time since the 1950s, it is largely due to the Biden administration’s short-sighted foreign policy, which has compelled Moscow to pivot to Beijing. The Russia-China entente probably represents the biggest US foreign-policy failure of the post-Cold War era—“a blunder of the highest order,” in the words of Michael Pillsbury, a former US official who authored a best-selling book, <The Hundred-Year Marathon: China’s Secret Strategy to Replace America as the Global Superpower>. Then-President Donald Trump called Pillsbury America’s “leading authority on China”.

Driving a wedge between Beijing and Moscow has been a longstanding US policy. But now America’s global pre-eminence has come under direct challenge from the burgeoning partnership between these two powers.

In the second half of the Cold War, following President Richard Nixon’s opening to China, the US co-opted China against the Soviet Union, gradually turning the Sino-American relationship into an informal alliance geared towards containing and rolling back Soviet influence. This two-against-one competition contributed to the Soviet Union’s imperial overstretch and, ultimately, to the West’s triumph in the Cold War without armed conflict.

In other words, the US and its allies won the Cold War not militarily but geopolitically. However, under successive presidents, from Nixon to Barack Obama, the US aided China’s economic rise over four decades. In the process, the US created the greatest rival it has ever faced.

It was President Trump who finally brought about a paradigm shift in America’s China policy. Trump was the first US president in over 40 years, as the <Financial Times> put it, “to bash China on three fronts simultaneously: trade, military and ideology.” However, the Russia collusion hoax cast a long shadow over the Trump presidency and made Russia (to China’s relief) the prime US focus. The big loser from the hoax was America by undermining the pursuit of a balanced US foreign policy focused on long-term interests.

It speaks for itself that a two-against-one global competition is emerging again today, but with China and Russia bandying together against the US.

A forward-looking US administration would avoid confronting Russia and China simultaneously, and instead seek to play one off against the other. Yet, Biden’s policy is helping turn two natural competitors, Russia and China, into close strategic partners. Far from driving a wedge in the China-Russia partnership, the US is becoming the bridge that unites China and Russia.

Consequently, an already-overextended US seriously risks accelerating its relative decline through strategic overreach.

With US attention and resources focused on conflicts in Europe and the Middle East, China’s efforts to alter the territorial and maritime status quo in Asia and secure strategic dominance are reaching a tipping point. Yet, some in the West myopically insist that the US must first defeat Russia in Ukraine before pivoting to deter China. As if Xi would wait to move against Taiwan until the US has humiliated Russia in Ukraine in a long war and then turned its attention to containing China.

The last thing Xi would like is an end to the Ukraine war because that would leave the US free to focus on the Indo-Pacific. This explains why China, as the Biden administration now acknowledges, is quietly aiding the Kremlin’s war in Ukraine by sharing geospatial intelligence for Russian targeting and supplying weapons-related components. The transfers suggest that, before making a move on Taiwan, Xi wants the Ukraine war to further deplete America’s weapons and munitions stocks.

The flip side to America’s deepening involvement in conflicts elsewhere, however, is its desire to avoid a direct confrontation with China. This explains Biden’s more conciliatory approach to Beijing, including greater emphasis on diplomacy than on deterrence.

The US may still be the world’s foremost military power but it is in no position to meaningfully take on two major powers, Russia and China, simultaneously. According to its own official national security doctrine, the US maintains military capabilities to fight and defeat, with support from at least some allies, China or Russia—but not both simultaneously.

In this century, the US did wage two overlapping wars but against much weaker states—Iraq and Afghanistan. Yet these protracted wars exposed shortcomings in America’s ability to pursue two military missions simultaneously at full tempo.

Against powerful states, US combat capability is geared for a one-war scenario involving a single enemy. The US Congressional strategic posture commission confirmed that the American military is not equipped to fight simultaneous wars against two major rivals. Russia and China both field formidable strategic and theatre nuclear forces, and a direct US war with either could potentially turn nuclear.

Today, the American military is stretched thinly across three regions—Europe, where the US is deeply involved in the Ukraine war; Middle East military operations in support of Israel’s Gaza war; and the Indo-Pacific, where the spectre of a Taiwan Strait contingency looms large.

The drawn-out Ukraine war (not to mention the renewed US involvement in the Middle East conflict) is impeding the US attempt to rein in China’s aggressive expansionism. Indeed, by overextending the American military, it is weakening Washington’s deterrent posture in the Indo-Pacific region, thereby making a Taiwan Strait crisis more likely. Biden has diplomatically sought to stave off a Taiwan Strait contingency without credibly signalling a genuine US willingness to defend Taiwan militarily or without strengthening deterrence against China through additional force deployments.

If Russia’s invasion of Ukraine has shaken the foundations of the international order, as many in the West believe, a Chinese takeover of Taiwan would usher in a new global order by ending America’s global supremacy and undermining the US-led alliance system. It would change the trajectory of the 21st century in the way that World War I transformed the 20th.

The longer the US is involved in the war in Ukraine, the greater will be the strategic space for China to advance its expansionist agenda, including by accelerating its accumulation of military and economic power. The Ukraine war has already led to the US rapidly depleting its munitions stockpiles and exposing its woefully inadequate capacity to restock, thus setting off alarm bells in Washington.

It is against this backdrop that Biden has been pursuing a more conciliatory approach to Beijing. Biden has stepped up his diplomatic outreach to Beijing to help avert a Chinese attack on Taiwan. But with the US looking overextended and Xi viewing Biden’s conciliatory posture as one of weakness, the risks of failing to deter aggression against Taiwan are increasing.

Consequently, concern is growing in Washington that a Chinese attack on Taiwan could drag the US into a direct war with a near-peer adversary. But it is conceivable that Xi, in order to avoid triggering a direct conflict with the US, could seek to bring Taiwan to its knees by employing the techniques of incremental expansionism that his regime has successfully honed in the South China Sea.

Today, with Russia tying the US down in the European theatre, Xi has greater strategic room to achieve what he has called China’s “historic mission”—the forcible absorption of Taiwan.

The issue is no longer if but when Xi will move against Taiwan, a thriving democracy that also happens to be the world’s semiconductor superpower.

In his first speech as a third-term president, Xi linked the incorporation of Taiwan to the success of his national rejuvenation policy, saying the “essence” of his great rejuvenation drive was “the unification of the motherland”. Xi has said China must prepare for war to cope with a new phase of ideological and geostrategic “struggle”. His regime has unveiled new air-raid shelters in cities across the strait from Taiwan and new laws to more easily activate military reservists.

Xi, meanwhile, has accused the US of pursuing “comprehensive containment, encirclement and suppression against us.” And, as if to highlight a potential Sino-Russian axis, Xi has joined hands with Putin to identify America as their two countries’ common adversary.

In this light, the US should be addressing its strategic overstretch, not exacerbating it through greater entanglement in European and Middle East security. It must persuade Europe to step up and take primary responsibility for Ukraine, its own neighbour. The Biden administration’s current primary focus on containing Russia is clearly at the cost of countering China’s drive to supplant America as the world’s foremost power.

A full military alliance between China and Russia would be America’s worst geopolitical nightmare come true.

If the US is to remain the world’s preeminent power, it must focus its attention on the globally ascendant and expansionist China. Without addressing that core challenge, the US will lose its global supremacy.

AmericageopoliticsJoe BidenRussia invades UkraineRussia-China nexusVladimir PutinVolodymyr ZelenskyXi Jinping