Opinion | Why China Can't Bail Out Putin's Economy - The New York Times - 0 views
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Can China, by offering itself as an alternative trading partner, bail out Putin’s economy?
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it’s hard for Russia to pay for imports — sorry, but you can’t carry out modern international trade with briefcases full of $100 bills. In fact, even Russian trade that remains legally permitted seems to be drying up as Western companies that fear further restrictions and a political backlash engage in “self-sanctioning.”
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The Russian elite can live without Prada handbags, but Western pharmaceuticals are another matter. In any case, consumer goods are only about a third of Russia’s imports. The rest are capital goods, intermediate goods — that is, components used in the production of other goods — and raw materials. These are things Russia needs to keep its economy running, and their absence may cause important sectors to grind to a halt.
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First, China, despite being an economic powerhouse, isn’t in a position to supply some things Russia needs, like spare parts for Western-made airplanes and high-end semiconductor chips.
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Second, while China itself isn’t joining in the sanctions, it is deeply integrated into the world economy. This means that Chinese banks and other businesses, like Western corporations, may engage in self-sanctioning
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Finally, a point I don’t think gets enough emphasis is the extreme difference in economic power between Russia and China.
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Putin may dream of restoring Soviet-era greatness, but China’s economy, which was roughly the same size as Russia’s 30 years ago, is now 10 times as large.
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Germany’s gross domestic product was only two and a half times Italy’s when the original Axis was formed.
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So if you try to imagine the creation of some neofascist alliance — and again, that no longer sounds like extreme language — it would be one in which Russia would be very much the junior partner, indeed very nearly a Chinese client state.