Ian Welsh

The horizon is not so far as we can see, but as far as we can imagine

Category: Russia and Eastern Europe Page 10 of 19

The China Trap

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On March 2, 2022

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I’d really hate to be China’s leadership right now. This is rock/hard place for them. If they don’t keep Russia alive, they will have no ally when it’s their turn, but the US and Europe are likely to put a ton of pressure on them for sanctions & that will start the cold war earlier than they wanted (for them — it’s already started for Russia).

Obama famously pivoted to China, calling it the biggest threat. Trump slapped on sanctions and used a ban on semiconducters to absolutely savage Huawei, the flagship Chinese tech company, whose phones were rivaling Apple and Samsung, and whose 5G technology was the most advanced and ready-to-deploy in the world.

They put immense pressure on Europe to not use Huawei 5g tech and largely succeeded.

When Biden came in, he removed none of Trumps sanctions.

In effect, the US has been declaring China its enemy for about 12 years now, through both Democratic and Republican administrations, and over the last few years, anti-China sentiment in DC has solidified. As far as I can tell, it is truly bipartisan.

China has known that a cold war with the US was inevitable for a couple of years now, though they suspected it before. They had hoped to keep Europe as a neutral customer, but Europe has bowed down to the US whenever push comes to shove, so China, like Russia, appears to regard Europe as an American satrapy — a subject state who will do what the US says.

The US and Europe will now put immense pressure on China to comply with sanctions on Russia and to not help Russia get around them.

My guess is that China will not, substantially, comply. The calculus is simple: Cold war with the US is coming, and if they let Russia get taken out, they lose a powerful ally and will then be surrounded, rather than having most of their Western flank covered by another Great Power.

Russia has repeatedly told the West to go fuck itself with regards to sanctions. They regarded, even before this war, more sanctions as inevitable. All that the war has done, they believe, is move the sanctions forward. China is likely to have the same calculus: sanctions, tariffs, and so on are never removed, only increased over time.

Both China and Russia have their own SWIFT alternatives. They will hook together and be offered to the rest of the world. As non-US allies have seen, with Venezuela, Iran, and now Russia (among others) that the US will even freeze reserves, they will join the Chinese and Russian systems and settle trade in Yuan. They will move reserves out of the US/European system.

This is, however, a huge hit to both China and the US. The US cannot currently decouple from China — it’s impossible. The US actually needs China more than China needs them. Remember, China is the largest industrial power, not the US.

It’s still a terrible trap, though, and the Chinese will, I think, play to mitigate. The US will not slap the worst sanctions on just yet, but will rush to move production to low-cost US allies.

There is an alternative, of course. China could buckle, agree to join the “rules-based order,” and play by American rules. The issues here are threefold.

First: This means China is not allowed to take control of value chains, which provides much of the real profit. Probably 15 percent or so of the value in a value chain comes just from that. They will have to keep paying US intellectual property fees, which amount to another ten to 15 percent in a lot of industries.

Intellectual property, if it’s not obvious, is on the table. Certainly Russia will stop paying these fees, that’s almost certain.

Second: Playing by Western rules means, the Chinese believe, staying stuck in the middle income trap and not making it to high income. This is one of those places which is a genuine trap: Decoupling will be a huge hit, but staying in the system and playing by the rules set up to favor the US and its allies means being in a system which keeps China from becoming a rich nation.

Third: There is an emotional component. As much as many Europeans, especially eastern Europeans, hate and fear Russia, China has a deep resevoir of hate for Europe, and the US for the “century of humiliation,” for Taiwan (to them a rebellious province which they would have retaken years ago if the West didn’t support it), and of course, a lot of hatred for Japan, the West’s primary Asian ally, for its invasion, occupation, and atrocities before and during WWII.

Emotionally, the Chinese are primed to tell the West to go fuck itself. They didn’t see why they should’ve play by rules made even when they were at their weakest. The “rules-based international order” to them is nothing but a set of rules set up by people who don’t want them to be a great, rich nation again. Rhetoric from the US has solidified this impression, and I think more correctly than not.

So the “cut a deal and compromise” really means “accept the current world order and play by rules that China thinks are unfair to them, and are made without their input.”

My guess is that China will do whatever it takes to keep Russia alive and to stop Western sanctions from achieving their declared aim: To collapse the Russian economy and cause regime change. Viewed pragmatically, I think that is the right call if you are the Chinese leadership, because the other two options (acquiescing to Western rules or letting Russia collapse and facing the West w/o Russia) seem worse.

I would guess, and it is just a guess, that this takes about four to eight years, because the US would be insane to decouple now, and China also wants time to prepare. But emotions are running high and a lot of policies have been made without clearly thinking through their consequences lately, so I while I think it’s odds on, I won’t be surprised if emotions rule instead. The decoupling may happen sooner.

Welcome to the new Cold War. Remember, in this one, the world’s biggest industrial power and most populous nation is on the other side. This isn’t 1950 or even 2000. China is the biggest trade partner of more nations than the US, not the other way around.

And China needs what Russia has: wheat, oil, and mineral resources.

Cold War 2.0 isn’t one in which the West are necessarily the favorites to win.

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Ukraine: The Ethical Dimension & Sanction Decision Making

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On February 28, 2022

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Ok. Deep breath.

Is what is happening in Ukraine worse than what happened in Iraq?

Why was the US not hit with crippling sanctions, like is being done to Russia?

Think this stuff through on your own, and if you get it, your belief that anything happening is being driven by ethical considerations will go away, and you’ll be able to think clearly.

Now, let’s talk sanctions. They’re more severe than initial indications, and Russian reserves have been blocked, as was done to Venezuela and Afghanistan (this, plus sanctions, is what is starving Afghans to death this winter, by the way).

Now, put yourself in Putin’s shoes. Assume the sanctions really are severe enough to collapse Russia and kill millions and, not incidentally, remove you from power at which point you, your family, and everyone close to you, will be killed. (That’s what is most likely if Putin loses power.)

You are a nuclear superpower with a Great Power military. What do you do? Do you just sit there? Or do you try and use that military to force the return of your reserves and some reduction in the worst sanctions?

(I don’t think the sanctions are quite that severe, but I could be wrong; I’m still thinking it through. However, many commenters — and even politicians — are clear that this is what they want: To collapse Russia under sanctions. But Russia is not Venezuela, or Iran, or Afghanistan.)

Put yourself in Putin’s shoes, and remember, he’s been known to raze entire cities.

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What the West and Russia Want in Ukraine & the “Good” Result for Ukraine

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On February 28, 2022

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There’s a lot of nonsense going around, including talk of Russia losing the war because, less than five days into the war, they haven’t conquered Ukraine.

The German blitz of Poland took five weeks. The conquest of France took six weeks — and people were astonished. Ukraine is the largest country in Europe except for Russia itself.

The sources I respect say that Russia is taking losses, but the war is not in question, and they are advancing about as fast as the US did into Iraq. Russia will win the war, though they may take more damage than they expected (but as we have no idea what they expected, who knows?). Ukraine is a modern equipped army; it isn’t Iraq with obsolete equipment, or Libya, or Afghanistan.

The question is not whether Russia wins the war, it is who wins the peace.

What the US and Europe want is to turn Ukraine into a guerilla quagmire, like Afghanistan in the 80s, or like Iraq and Afghanistan were for the US.

What Russia wants is to turn Ukraine into a guaranteed neutral state and withdraw its troops out of the country, minus Donbas and Luhansk.

The good result for the Ukraine, which most Westerners don’t seem to get, is what the Russians want. Austria was neutral in the Cold War, and that was not horrid. A multi-year guerilla campaign will devastate Ukraine in ways that will take generations from which to recover, because if the Russians have to fight an insurgency, they will be utterly brutal, as they were in Chechnya (successfully).

Moralist yapping about “the right to choose” is off the board. The only good result for Ukraine and Ukrainians is a negotiated settlement. The West egged them on and left them to swing, as the smart people said they would.

This video, predicting this situation in 2015, is pretty much required watching.

As for the economic consequences for Russia due to sanctions, it depends on what they are. If they are stopped from selling oil, natural gas, and wheat to the West, that will hurt. Sanctions less severe than that will be painful, but not crippling.

The problem here is China. For the last six years or so, the US has declared that China is an enemy. They used sanctions to cripple the most important tech company in China, Huawei, and have slapped sanctions and tariffs on China.

Chinese leadership sees a confrontation with the US as inevitable. They had hoped to keep good relations with Europe, but European countries have bowed to US pressure to shut out Huawei based on jingoistic claims that “they’ll spy on you,” which is hilarious. “Instead of us being able to see all your info, the Chinese will!”

China needs Russia’s resources: oil, wheat, and minerals. They know that they can be cut off from most other sources, but because of geography, and because Russia needs China, Russia is a safe supplier. In turn, China can let Russia into their SWIFT equivalent, finance them, and sell that almost every manufactured good they need, with a few exceptions (primarily semiconductor based, but China’s working on that).

Further, to let Russia fall would mean that China would be encircled. The CCP isn’t that stupid.

Basically, the West wants to use sanctions to “choke out” Russia, but China believes the West will then want to use sanctions to choke them out. If they let Russia go down, they’re next (they’re next either way, really, but they can have a major ally or not).

What the US has succeeded in doing is making Europe choose to turn their back not just on Russia, but, inevitably, on China as well.

This is a strong cold war coalition (Cold War is our future, as I have been saying for about four years now), but notice that it is not as strong as the previous cold war, because China is now the primary manufacturing power and the most populous nation, not the US.

Most of Africa, the Middle East, and South America is staying out of this. Even India refused to vote against Russia in the Security Council. Three of the four gulf states refused to vote against Russia, and, in the UN general assembly, the West is struggling to get 50 percent to vote against Russia.

In the West, we have a huge propaganda bubble going on — “Russia is the worst ever, blah, blah, blah.” What they have done is certainly a crime, but no one outside the bubble can take American and European whinging seriously; they remember Iraq, and Libya, and know that the US still occupies Syrian oil fields, while US ally Saudi Arabia bombs the hell out of Yemen, and Israel has annexed land from neighbouring states (supposedly Russia’s great crime).

Russia has done something bad, but this is not about morality. It is about power. Only the US and its allies are supposed to be able to do what Russia is doing, and people outside the Western bubble recognize this hypocrisy.

The Chinese Embassy in Russia tweeted this:

Indians I follow are noting that Russia has been a firm friend to India since independence, and that the US and Europe have not been.

So the question here is whether or not Russia gets drawn into a guerilla quagmire. If it doesn’t, the question then becomes: How hard will the sanctions hit? In the medium to long term, this leads down the road to two separate economic and political regions and a new cold war, as I have been stating for years.

Despite the hysteria, nothing here is surprising. Russia asked for Ukraine as neutral and security guarantees, and didn’t get them. So they invaded, exactly as I wrote (in advance) was likely. Measheimer predicted this in 2015 (video above), and George Kennan, the architect of the Cold War containment policy, noted that NATO expansion would lead to this back in the 90s.

Russia is not Iraq. It is not Iran. It is not Venezuela. It is not Libya. It cannot be treated as minor state who can be choked out by the West at the West’s whim, especially not when the US has been stupid enough to tell China it is also an enemy.

Even in realpolitik terms, telling both Russia and China they are your enemy, at the same time, is breathtakingly stupid.

If you want the best for Ukraine, hope they negotiate soon. The longer they wait, the weaker their negotiating position. The best case for Ukraine is now (as it was three months ago) an Austrian-style neutrality agreement. There will be overflights and inspections, but that’s just how it’s going to be.

The world, outside the West and some of its closest allies, is not in hysteria about this. They recognize it’s aggressive war, but they do not see that what Russia has done is worse than American and European behavior over the last 20 years. Indeed, at least so far, and unless the US gets its wish for a guerilla quagmire, this is not nearly as bad as Iraq.

So relax and take a deep breath. This is bad, and there is a tiny chance of a miscalculation that will kill us all in nuclear armageddon. But, mostly, this is just geopolitics playing out as anyone with sense knew it would. The US has split Europe from Russia — and soon China and Russia will be strong allies, and a new cold war will occur, though how soon this will be crystal clear to everyone is, well, unclear.

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Putin Looks to Win Both the War & the Peace

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On February 25, 2022

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So, saw this yesterday:

“Biden said he’s seeking to shield Americans from higher energy costs by exempting energy payments from sanctions…The sanctions didn’t appear targeted at Russian energy, aluminum, and wheat industries…”

… Former Bush official McNally called it: “I expect stringent sanctions, but nothing on energy — bankers, ships, and oligarchs. They don’t want to add upward pressure on oil prices — they are absolutely terrified.”

Putin will win the war. He will leave Ukraine, except in the newly recognized republics. Whatever regime is in control of the rest of the Ukraine will now understand the consequences of even thinking of joining NATO. The West egged Ukraine on and then did nothing while Russia invaded it.

The sanctions which are about to hit Russia are serious, but if they don’t include wheat, aluminum, energy, or maritime shipping or hit oligarchs by kicking them out of London and other European capitals, they aren’t really going to matter.

Putin has made fools of the Western elite class again. Yes, the intelligence was right, but it didn’t matter. He’s figured exactly out what the West will and won’t do. He calculated right, they calculated wrong.

Because people are all worked up, I will state, again: This is not a moral judgment. Putin, like every recent US President, is a war criminal who should be hung. But he’s competent, and Western elites are fools.

Putin calculated correctly because, indeed, if Russian oil is cut off from the West, the economic consequences will be huge. He can withstand the loss of customers better than the customers can withstand the loss of oil and natural gas.

I don’t really get it. (I mean, I do; they’re idiots.) If they weren’t going to actually hit Russia with real sanctions & they believed Russia would invade, they should have actually negotiated to avoid the invasion. What here is better than saying “Okay, Ukraine won’t join NATO”?

However, I think there’s still a slight chance Putin has miscalculated. Congress may pass a ban — even if Biden doesn’t want it. But, it looks to me like Putin is fine with his BATNA; he thinks an oil cutoff will hurt the West more than it hurts Russia.

(A BATNA is your best alternative to a negotiated agreement. Putin wanted things from the West, they wouldn’t give those things to him, and his BATNA was “Okay, I’ll invade, you’ll hit me with sanctions, and I can live with those sanctions.)

At the end of the day, neglecting to negotiate over whether Ukraine will ever join NATO or is a neutral country will result in Ukraine never joining NATO and a lot of people dying. (I know some people think he would have invaded anyway, but we’ll never know. We didn’t negotiate.)

Negotiation is not based on the notion that “None of the things you want are a starter. We will talk, but nothing you want will happen.” That was the Western stance. Well then, Putin had a BATNA he was willing to use. What was the West’s?

No matter how much I take the sheer incompetence of Western elites into account, I can never keep up. They are always more stupid, more foolish, and more greedy than I can imagine.

Anyway, Putin will win his war. He will probably win his peace; the sanctions are not going to be so large he can’t handle them. Indeed, the way that the West has ratcheted up sanctions over the years has been a favor to him. Do remember that Russia has said that if they are cut out out from SWIFT, they will consider it an act of war, and then ask yourself, “Is Putin bluffing?” Then ask yourself how the assumption that Putin is bluffing and calling his bluffs has worked out for people over the years.

Putin will not let the West choke him out like they did Iran and Venezuela. And it doesn’t look like the West is even going to try.

Meanwhile, China has been crystal clear that they are not going to cut Russia off. China’s foreign ministry statement:

When the US drove five waves of NATO expansion eastward all the way to Russia’s doorstep and deployed advanced offensive strategicweapons in breach of its assurances to Russia, did it ever think about the consequences of pushing a big country to the wall?… Did the US respect the sovereignty and territorial integrity of the Federal Republic of Yugoslavia when US-led NATO bombed Belgrade?

Did the US respect the sovereignty and territorial integrity of Iraq when it launched military strikes on Baghdad on unwarranted charges? Did the US respect the sovereignty and territorial integrity of Afghanistan when US drones wantonly killed innocent people in Kabul and other places? Did the US respect the sovereignty and territorial integrity of other countries when it instigated color revolutions and meddled in their internal affairs all around the world?

It is hoped that the US takes these questions seriously and abandons double standards.

Yeah.

Let’s be clear, China will never let the West choke out Russia because China knows that the US (and increasingly the EU) considers China the real enemy — once Russia is taken out, China’s next. If Russia goes down, China no longer has a secure back, or a secure source of oil, minerals, or food. With Russia, China has a good chance of winning the oncoming Cold War. Without it, China loses that war.

The West appears unwilling to put in real sanctions because they would hurt the West more than they would hurt Russia. (Note that England’s economy would collapse if they really froze out oligarchs, starting with the London real-estate market. I bet half the richest people in Britain would be bankrupt in six months. Even the central bank might not be able to save them by printing money because, without Russians propping up the City, the pound would collapse.)

We’ll see how this plays out. But I think Putin comes out of this with a win. That’s not a moral judgment, it’s a pragmatic one.

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Calm and Perspective About Ukraine

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On February 24, 2022

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Obviously, the war in Ukraine is bad. Innocents will suffer, people who needn’t have been will die and be crippled, and hurt.

However, I’m seeing a great deal of hysteria or near-hysteria over this, and it mostly isn’t justified. It is unlikely that more people will die in this situation than died due to Iraq — or Libya. Some years back, the Congo had a war in which six million people died, and most Westerners don’t even know it happened. Right now, people are starving to death in Afghanistan and Yemen, and Yemen is constantly being bombed. Etc.

So, on humanitarian grounds, this is no worse than many other wars, and while we don’t know the final butcher bill (and can’t guess very well yet, as we don’t know exactly what Putin intends to do), it’s unlikely to be as many deaths as in the Congo or as resulted from Iraq (as all ISIS deaths must be counted in the tally, etc.).

What makes Ukraine different, emotionally, to Westerners, is that they are white Europeans.

The next question is geopolitical. Ukraine feels more important because it seems like the end of a particular political order. It is not that Russia is recognizing new states and carving up an old state; Israel took the Golan Heights, and Kosovo was created by NATO military intervention and would not exist without it. For that matter, Russia has run this playbook before, in Ossetia (Georgia) and Crimea.

So this is not NEW. It is not something completely verboten or anything, as many claim.

It feels new because Russia defied the US, the EU, and NATO, invading a European state, and did so in the face of huge sanction threats.

But, in geopolitical terms, all that is happening is that Russia is saying, “We are a ‘Great Power’ and we will take the same rights as the US has taken to invade and annex.”

This is not a greater war crime than Iraq, or Libya, or the Israeli invasion and occupation of Lebanon. What it is, is the moment at which the West realizes that the US is no longer the sole “Great Power.”

There is, of course, a small but very real risk here because Russia is a great power, with a real military, and a lot of nuclear weapons. I have seen a fair number of people calling for NATO to intervene militarily, and I don’t think Americans understand what they’re calling for. Since the Civil War, the US hasn’t had a war with an enemy that could hurt them in the continental US. If Russia gets bombed, the continental US will get hit as well. Russia is not Iraq, Korea, Vietnam, Afghanistan, or Libya. It has a real military and can strike back, even without using nukes.

The rage, the impotent rage and fear, is, I think, because of this. At last, the US has come up against an enemy it can’t just shove around. That hasn’t been the case since the USSR collapsed.

Fortunately, saner heads — including Biden — recognize this, which is why they’re reaching for further sanctions and not intending to bomb, bomb, bomb.

I will point out that I wrote that Russia would go to war if it wasn’t given a guarantee that Ukraine would not join NATO. Put aside, “But they should be able to do whatever they want,” and look at the situation pragmatically. Drop the emotions.

What is the end result of not signing a piece of paper saying Ukraine will not join NATO?

Ukraine won’t join NATO. Even after the war (assuming they aren’t occupied), they won’t because Russia has made it clear that if they even gesture in that direction, they’ll be invaded again. So the end result is dead people, recognition of breakaway regions, and Ukraine not joining NATO anyway.

Russia will be sanctioned, but it is ready for that. They have stated that if they are cut off from SWIFT, they will consider that a declaration of war. They don’t intend to be slowly choked out like Venezuela, Iran, and Iraq in the 90s. Nor will China allow them to be choked out, because if Russia’s choked out, China knows they’re next. The consensus in DC that China must be humbled and forced into a subservient position in the “rules-based international order” is absolutely iron-clad and bipartisan.

So, for a few years now, I’ve been writing about the next cold war. This is the start of it. It doesn’t include China yet, but they won’t cooperate with sanctions on Russia, so it may not be long before it does. I also have an entire section called “The Age of War and Revolution,” and a discussion of this is the start of it — along with the “The Twilight of Revolution,” a sub-category. Neoliberalism no longer rules Russia, in large part because of the sanctions. In time, it won’t rule China either, and in some ways it never has (they are neoliberal for export purposes, but not internally, and their internal market is huge).

The foolish “End of History” nonsense is now obviously dead. It was always the most stupid intellectual movement of the past 50 years, and only poltroons ever believed it.

History is back.

But in the meantime, while war is awful and always will be (and for the record I’m happy to see war crimes tribunals for Putin so long as the last five US presidents are also in the dock, and I’d even volunteer as the executioner), this isn’t likely to be as bad a war as many other recent ones. So except for the remote possibility of nuclear war, there’s no need to be more upset than you were about Iraq or the six million dead Congolese.

Take deep breaths and carry on. Nothing that is happening is unexpected in the broad strokes.

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Putin Is Running the Georgian and Kosovo Playbook in Ukraine

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On February 24, 2022

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As I noted last week, the playbook for Russia in Ukraine is based on what happened with Kosovo.

Putin recognized the breakaway regions, moved troops in, and is now attacking and bombing Ukraine — just as both Serbia and Georgie were attacked. I didn’t expect the general invasion, but I should have, especially since I wrote:

It’s ironic revenge for Kosovo and Serbia. Say there are atrocities/genocide, recognize a break-away, bomb and use troops to enforce your will.

I will be surprised (and wrong) if there is a general occupation of Ukraine, but it is possible because of the NordStream cancellation. What will most likely happen is the Ukrainian military will be defeated in the field, as were the Georgian and Serbian militaries, to make the point that they can’t resist, they have to let Russia do what it wants, and, as Putin himself has said, to demilitarize it. (“We destroyed your military, and you will not build one up or let foreign troops in, or we will do it again.”)

If Putin does occupy Ukraine, it will be because he considers it (like Taiwan) nothing more than a breakaway province, considers Western sanctions inevitable (he said so in his most recent speech), and figures, “Fuck it, might as well take the pain now as later.”

It was wise of NATO nations to remove diplomats, as that means it won’t matter if there’s an “accidental” embassy bombing, which is what happened to the Chinese embassy during the Serbian war.

With the announcement that NordStream will not happen, Russia has very little reason to play by Western rules (we can do it, you can’t), and they won’t.

Welcome to the world I have been predicting for a few years. Russia will be increasingly cut off, China is next on the list (they will not cooperate with US and European sanctions on Russia), and the world will split into two economic areas at cold war, though it won’t be immediate unless things spiral completely out of control.

Europe will be hurt badly by this, as they need far more from China and Russia than they do from the US, as this excellent article by Michael Hudson points out.

Welcome to interesting times.

Update: If NATO responds militarily, there is a good chance the war goes nuclear. And if it does, China will use the opportunity to reconquer Taiwan.

Update 2: What George Kennan, the architect of USSR containment, said back in the 90s.

 

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How to Understand Russia’s Playbook in the Ukraine

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On February 21, 2022

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It’s ironic revenge for Kosovo and Serbia. Say there are atrocities/genocide, recognize a break-away, then bomb and use troops to enforce your will.

Westerners have never understood how angry the whole Serbian intervention made Russia, who saw Serbia as a core ally. It’s one of the main turning points in Western/Russian relations.

To Russia, this is their “humanitarian intervention.” I’m quite sure Putin finds it very, very funny.

 

If Russia Invades

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On February 19, 2022

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It will just be Donetsk and Luhansk, where they have support. They are not going to be drawn into a guerilla war by trying to control all of Ukraine. Most likely, they will recognize the regions, then move in.

There will be no full-fledged invasion and occupation, though, if the Ukrainian military seriously resists, Russia will destroy it.

Ethno-linguistic map of Ukraine

More on Russia, not directly related to Ukraine, soon.

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