East Asia Nervously Watching Events in Crimea

China doesn’t want to alienate Russia nor set a precedent for regions of its own to break away.

When the Crimea was voting to secede from Ukraine and join Russia, President Vladimir Putin was said to be on his proverbial hands and knees offering cheap gas and other inducements to China for its support. But China decided in no uncertain terms that it would stay out of this dispute when it abstained from a resolution condemning the Crimean vote in the United Nations Security Council. China is walking a diplomatic tightrope. It wants to avoid antagonizing a key ally in Russia without siding with the West and causing repercussions in East Asia.

What is certain is that East Asians are watching China’s actions closely for indications of its future policy in regards to the disputes it has in the East and South China Seas with its smaller neighbors.

While China is not joining the sanctions led by Europe, Japan and the United States against Putin’s cronies anytime soon, Sino-Russian relations were dealt a blow nonetheless when China abstained from a resolution that had been introduced in the Security Council by the Americans. Russia was left alone to block this condemnation of the Crimean referendum. The resolution received thirteen votes in favor.

On the one hand, China does not want to endorse the changing of international borders which could set a precedent for its restive regions of Tibet and Xinjiang. China has barred foreign journalists from the regions and deployed more security there in recent years to quell widening unrest and protests against the central government.

China shares a long border with Russia that has been unstable at times and which brought the two powers to the brink of war in the 1960s. With China’s military increasingly focused on its maritime disputes in the East and South China Sea, coupled with domestic unrest in its western provinces, it can ill afford to see a deterioration on its northern border.

But China also does not want to side with the West at the expense of Russia, a key ally which it relies on for energy imports. It is altogether an inopportune time to risk a rupture in trade relations with Russia because the Chinese economy is showing further evidence of slowing after the release of the purchasing manager’s index last week. Measuring China’s manufacturing industry, it showed weakness for the fifth month in a row. This follows economists at Wall Street banks cutting their forecast of economic growth for 2014 during the first quarter. China needs Russia as much as Russia needs China.

In a few months, Putin is expected in Beijing to sign a massive natural gas supply deal with the Chinese. The agreement has taken years to negotiate and it looks as though it is finally complete. But one could argue that just as negotiations are concluding, China has gained enormous leverage by the threat of deeper sanctions coming down on Russia from the West. There is no evidence as of yet that China is willing to use this leverage to push the Russians into making more concessions.

A deal with China at this time for Putin would certainly help forestall his growing isolation and bring in hard currency. If Russia invades other regions of Ukraine, however, President Barack Obama had promised an expansion of sanctions and held out the possibility of targeting Russian oil and gas industries.

The stakes are high in Ukraine. China is carefully watching the West’s reaction to Russia’s annexation of the Crimea. Its increasingly aggressive moves in the East and South China Seas over disputed islands with its neighbors offer an arena where China could follow Russia should the West fail to respond strongly. Taiwan, for one, would be gravely concerned. So would Japan, the Philippines and Vietnam.

In Europe last week, Chinese president Xi Jinping called on the International Monetary Fund to extend financial support to Ukraine. Previously, China had proposed setting up an international mechanism to find a political solution. It seems that China is willing to look past Russia’s actions in the Crimea and go about business as usual.