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In this article we will talk about Russia's goals in 2014 and 2015, it will be analyzed from the categories of diplomacy, economy, and military directions. Throughout various periods in history, the leaders of the Russian state have consistently exhibited a profound fascination with the Black Sea region, particularly the Crimean peninsula and its strategically vital port of Sevastopol. Following Russia's defeat in the Crimean War in 1856, when it was compelled to comply with conditions imposed by France and England, including the relinquishment of its military base in Sevastopol, Russia has persistently pursued routes to gain control over Crimea and exploit its potential for dominating the Black Sea region. This pursuit remains ongoing to this day. During the era of Catherine the Great, Russia seized this strategically significant territory. However, in a later period, Nikita Khrushchev, the leader of the Soviet Social Republic, transferred this region to the Socialist Republic of Ukraine, where it remained under Ukrainian control even after the dissolution of the Soviet Union. Notably, for official Moscow, the port of Sevastopol retained immense importance for its geopolitical interests, as it was controlled through an agreement signed with Ukraine in 1997. This port plays a crucial role in supporting Russia's Black Sea Fleet, enabling it to project power in the region. Its significance was underscored during the 2008 Russia-Georgia war, as well as earlier conflicts like the Abkhazia war, during which Russia deployed its armed forces from the port of Sevastopol. On the Crimean Peninsula before its annexation, there were two separate armies representing Ukraine and Russia respectively. Both sides were perceived as legitimate by the local population, and there was no doubt regarding their legitimacy. As mentioned earlier, in the 20th century, Khrushchev transferred the Crimean Peninsula to the Ukrainian Socialist Republic. However, since both territories were integral parts of the Soviet Socialist Republic, the transfer held more symbolic significance than strategic implications. At that time, nobody foresaw the collapse of the USSR and the subsequent struggle for a new balance of power in the region. Given the substantial Russian population residing in Crimea, fostering active cooperation with the Russian Federation held great importance. Exploiting this situation, Russia employed covert operations, including the infiltration of Kremlin operatives disguised as local militia personnel, to gather information and influence the local climate. Furthermore, the Kremlin carried out a propaganda campaign aimed at stoking skepticism towards both local and central authorities, thereby making the population more receptive to the Kremlin's policies. Undoubtedly, the Russian military played a substantial role in the annexation of Crimea. However, it is crucial to acknowledge the significant impact of Russian propaganda and agitation mentioned earlier. The events of 2014 served as a stark reminder that Russia's relations and attitudes towards the Western world and post-Soviet countries are not isolated or independent matters. Simultaneously, the expansion of the European Union and NATO towards the eastern borders, nearing Russia's vicinity, was perceived by the Kremlin as both a challenge and a threat, seen as encroaching upon Russian interests. Throughout history, Russia has consistently viewed Ukraine as an intrinsic part of the Slavic world, particularly the Russian sphere of influence. It has regarded Ukraine's role as that of a buffer state positioned between Europe and Russia. To impede Ukraine's inclination towards the West, Russia made considerable efforts to redirect its trajectory away from the European Union, utilizing figures like Viktor Yanukovych. Subsequently, following the notable events of the Maidan Revolution in 2014, Russia initiated an active military campaign. These actions underscored Ukraine's pivotal position within the Kremlin's interests, highlighting its significance to Russian geopolitical objectives. The events that unfolded in the heart of Kyiv in 2013, along with the preceding wave of protests, were sparked by the pro-Russian leader Viktor Yanukovych's refusal to sign Ukraine's Association Agreement with the European Union. These incidents escalated into violent clashes between protesters and state security forces, serving as a stark reminder of Russia's unwavering determination to extend its influence over the country. Consequently, by "recruiting" Ukraine into its fold, Russia aimed to establish an axis of absolute power within its leadership, leveraging the collaboration between the two states. Indeed, events unfolded in a manner that resulted in Russia experiencing a significant geopolitical setback. However, this setback did not deter Russia from pursuing its goals. Instead, it deliberately executed a two-fold campaign. The first objective was the annexation of Crimea, while the second involved fomenting a series of protests in eastern Ukraine, which eventually escalated into a full-fledged rebellion. By adopting this approach, Russia aimed to assert its control over Crimea and fuel unrest in eastern Ukraine, furthering its strategic interests in the region. All this was very easy for Russia and it achieved its goals practically without resistance because, at the local level, the local population received the Russian military forces as friendly and considered them saviors. While Putin's actions may appear contradictory to the goal of restoring the Soviet Union, it is evident that his primary objective is to maintain the current political system under his leadership. The ongoing events in Ukraine serve as a demonstration of how crucial internal stability is, particularly for Russian-speaking communities. Preserving his power and leadership within the existing political framework is of utmost importance to Putin. It is worth noting that the Russian economy has faced degradation in recent years, particularly following the 2008 financial crisis. Previously, Putin enjoyed an 80 percent popularity rating with the country experiencing a seven percent annual economic growth. However, the current situation has seen a slight decline in his popularity, now standing at around 60 percent. This decline coincided with a slowdown in economic growth, with the economy shrinking to 1.4 percent per year in 2013. Consequently, Russia, and specifically Putin, feared that this economic stagnation would not be temporary but rather become a systemic and irreversible issue. Russia feels threatened by the West. It is particularly unacceptable for it to expand the European Union, and especially NATO, closer to its borders. The Ukraine crisis has turned into a zero-sum game where the winner gets everything and the loser gets nothing. In 2010, Ukrainian President Yanukovych and then-Russian President Dmitry Medvedev signed the Kharkiv Agreement, which entailed a lease agreement for Russia's Black Sea Fleet in Crimea. This agreement extended from 2017 to 2042 and included provisions such as discounted gas imports worth around 40 billion dollars for Ukraine. The primary objective of this strategic move was to safeguard the sovereignty of the Russian fleet in the region, particularly if Ukraine aligned itself with the Western world. However, it is important to note that Russia's motivations in the Ukrainian and Crimean conflicts were not solely focused on stabilization and de-escalation. Rather, it aimed to secure its naval power in the Black Sea region and maintain dominance over the Black Sea Fleet in Sevastopol. This was done to mitigate potential threats that could undermine Russia's influence in the region. The Black Sea region holds significant economic influence for Russia, serving as a crucial transit route for its energy exports to Europe. Before the 2022 war, Russia accounted for over 25 percent of Europe's total oil exports, with approximately one-third being transported via oil tankers through the Black Sea. Moreover, the region acts as a gateway to the Middle East, facilitating partnerships between Russia and numerous countries. Consequently, the Black Sea region represents a vital economic asset for Russia. By annexing Crimea, Russia was able to secure its naval power and dominance in the area. It had further plans to develop Novorossiysk, one of its largest and most important shipping ports. Additionally, Russia had ambitious aspirations for the renewal of its Navy, which would be considered one of the most significant developments in the future. The implementation of these plans would bolster Russia's provision of navigation and enhance its control of sea lines and communication in the Black Sea. Russia would also increase its military and political exercises to exert control and prevent potential internal conflicts that could pose a threat. By safeguarding its economic and security interests in the Mediterranean, Russia aimed to improve economic dynamics and protect its economy. Overall, these actions aimed to strengthen Russia's position and influence in the Black Sea region. Following the annexation of Crimea, Russia gained the ability to construct and upgrade its bases in the Black Sea region, thereby bolstering its military power without interference from the West or Ukraine. The reconstruction of the Black Sea Fleet enables Russia to maintain sovereignty over Sevastopol and the broader Black Sea region. This provides an opportunity for Russia to enhance and modernize its military equipment, including coastal missiles, ground forces, aircraft, and transit routes. While the annexation of Crimea has granted Russia certain advantages, it has also created new risks of tensions and confrontations in the Black Sea region. Regional and external actors have mobilized against Russia in response to these developments, posing challenges and potential conflicts in the area. It is important to recognize that the annexation of Crimea has not only altered the geopolitical landscape but has also sparked concerns and opposition from various stakeholders in the region. The annexation of Crimea indeed served to bolster Russia's sovereignty and strengthen its control over the Black Sea Fleet, particularly in Sevastopol, as outlined in the Kharkiv Agreement. By gaining control over Crimea, Russia was able to secure and enhance its transit routes for energy exports to both Europe and Asia. Moreover, the inclusion of Crimea within the Russian Federation has reduced the pressure and influence exerted by external actors, most notably the United States and NATO. This has allowed Russia to exert greater control and diminish the influence of these external forces in the region. It is indeed possible to argue that Russia's involvement and motivations in Ukraine and Crimea were not primarily driven by a desire to reduce unrest or protect the pro-Russian population within Ukraine. Instead, the situation with pro-Russians provided a convenient justification for Putin to intervene. By portraying itself as the protector of the pro-Russian population and defending them against perceived Western forces, Putin was able to boost his popularity among the Russian population. Simultaneously, Russia aimed to establish itself as a dominant state in the diplomatic arena, showcasing its ability to assert its interests and challenge Western influence. Therefore, Putin's Russia seemed to have pursued dual objectives, leveraging the situation to both consolidate domestic support and enhance its position on the global stage. It is accurate to recognize that great powers strive to secure wealth and resources, as a strong economy leads to enhanced military power and defense capabilities. In this context, Russia's approach to the Black Sea region can be attributed to its pursuit of rich natural resources and strategic dominance, as well as the potential for profitable transit routes to Europe and Central Asia. The annexation of Crimea has presented opportunities for Russia to strengthen its economy and expand its influence in the region. One of Russia's key economic goals in the Black Sea region is to control important transit routes and energy exports to Europe, given its significant contribution to Europe's oil consumption, accounting for over 25 percent. Additionally, Ukraine plays a notable role in the global grain market, ranking seventh in grain exports in 2014-2015, with 37.9 million tons of wheat. By gaining control over these resources, Russia could secure substantial profits from the wheat trade, exert influence over market prices, and leverage this resource as a mechanism for influencing other states. The economic considerations associated with the Black Sea region align with Russia's aim to strengthen its economy, expand its market reach, and exert greater geopolitical influence. These factors highlight the economic motivations behind Russia's approach and engagement in the Black Sea region. Considering that Crimea now belongs to Russia, it becomes clear that one of the reasons why the annexation of the peninsula was carried out; Economic benefits and a window of opportunity that involves adjusting the role of the main player in the Black Sea region and excluding Western influences. Great powers also seek to gain land power through military means, as this is the best possible way to gain maximum control over the region. This means that the most important military assets for states are land forces, reinforced by strong air and naval forces. In other words, states try to strengthen their military potential to compete with the rest of the world, which consists of territorial hegemons. Before and during the Cold War era, the Black Sea region practically belonged to Russia, but after the collapse of the USSR, it became a more or less vulnerable region. However, in recent years, the actions of the United States and the West have forced Russia to strengthen its power in the region in order not to lose control and influence. In addition, another advantage of the Black Sea region from the Russian perspective is that this area is the way to the Middle East, where Russia has partnerships with many countries. Therefore, the Black Sea is a very important economic asset for Russia. Crimea, especially Sevastopol, plays a very important role for Russia since the Russian Black Sea Fleet is stationed there. After Ukraine's independence, it became Russia's goal to maintain its navy and bases in Crimea. However, the problem, arising in the context of the Ukraine crisis, was the fear that if Ukraine were to be admitted to the EU under the 2013 agreement, it would affect Russia's influence and dominance in the Black Sea in the long term. The Kharkiv agreement would have given Russia the opportunity until 2042 to modernize and expand the Black Sea fleet. The annexation of Crimea, as well as the agreement signed in Kharkiv, increased the presence of the Russian fleet in the region and allowed it to begin the development of the Black Sea Fleet, which is assessed as one of the most ambitious military naval reforms in the region. This would further increase Russia's naval power in the long run. In conclusion, Russia has managed to secure the region for its good and thereby created a wider and better coastline for itself, which will strengthen Russia's military power in the future and thus reduce the influence of external actors on the Black Sea. Russia can improve the provision of navigation and maritime communication lines in the Black Sea. This will further increase military, economic, and political influence and prevent domestic conflicts, as well as eliminate the possibility of external pressures that could undermine Russia's security. Therefore, it can be argued from a futuristic perspective that if Russia's actions like this continue successfully, it will be able to protect its economy as well as its security interests in the Mediterranean.

Moscow-Beijing: combat coordination is growing. Powerful cold currents from the West determine the political atmosphere of the planet. Efforts are being made to counter them with warm currents from the East. Only the synergy of actions between Russia and China prevents the the consolidated camp of hegemony from entering the "final and decisive battle" against each of these recalcitrant powers individually. We are well aware of the situation on the western front of the global Cold War. However, on the eastern front, where there is no Ukrainian-scale conflict yet, tensions are approaching critical levels. Defense-related Chinese trade publications have published some very disturbing material in recent weeks. ... To destroy the latest American nuclear aircraft carrier Gerald Ford and the battle group accompanying it from a cruiser and 5 missile frigates, 24 hypersonic missiles without nuclear warheads were enough. In a computer simulation, rocket launches were carried out from 6 different areas, including even the Gobi Desert in Northwest China. Considered unsinkable, the carrier group was completely destroyed by a series of launches of distracting and damaging missiles. The Chinese took into account the capabilities of both the standard set of anti-aircraft weapons and the latest American SM-3 anti-missiles. According to the scenario described in the Chinese-language Journal of Test and Measurement, the American armada entered the waters of the South China Sea and continued to move in a menacing course, despite warnings. Similar scenarios play out regularly near Chinese shores. Another Chinese publication spoke about the mortal danger of such actions. The South China Morning Post, published in Hong Kong in English, reported that the war between China and the United States could begin in the South China Sea. On January 5, 2021, three US Navy anti-submarine aircraft searched for Chinese submarines near the Dongsha Qundao (Pratas) archipelago. Reconnaissance aircraft, as always, dropped electronic buoys and tracked the routes of Chinese submarines that were participating in major exercises. However, one plane flew too close to China, and Chinese fighters flew in from there. The Chinese regarded the situation as a huge threat to national security. There was a possibility of an armed conflict, and the Americans, taking into account the unfolding actions of the PRC Air Force and Navy, began to prepare for the worst and even destroyed expensive buoys with top-secret equipment. The description of the conflict in the Chinese specialized magazine Shipboard Electronic Countermeasures does not give details of the confrontation. However, everything was very, very serious. No wonder the Chairman of the Joint Chiefs of Staff of the United States, General Mark Milley, made a phone call to the Chinese Minister of Defense a couple of days later, assuring him that the Pentagon had no intention of provoking a real war. He even promised to inform his counterparts in Beijing in advance about the intentions of policymakers in the event of a critical situation. These two sensational publications did not appear by accident. One can only guess how many dangerous situations arise on the line of contact between the military of China and America in the Asia-Pacific basin. But, as the Chinese proverb says, “Heaven proposes, Xi Jinping disposes.” The Supreme Commander, acting at the strategic level of planning and decision-making, is responding to Washington's growing aggressiveness by demonstrating readiness for retaliatory actions on the battlefield and intensifying combat coordination with Russia. Planned for April, Xi Jinping's visit to Moscow was postponed to the end of March, and negotiations with Vladimir Putin lasted a total of 8 hours. Even not so much the published documents as the subsequent events showed qualitative changes in the partnership between Moscow and Beijing. The time has come for all-round combat coordination. It began with hours of face-to-face talks between the two supreme commanders. Soon, Chinese Defense Minister Li Shangfu came to Moscow. After the visit of an experienced and energetic military commander, Chen Wenqing, curator of internal and external intelligence services, arrived in Moscow. Reports of his meetings with the secretary of our Security Council, Nikolai Patrushev, showed the resolute attitude of the chief intelligence officer of the Celestial Empire towards the West. For its part, the Kremlin decided to reinforce the dynamics of combat coordination with a "volley of the main guns." A delegation of high-ranking officials and business leaders headed by Prime Minister Mikhail Mishustin headed to Beijing, unprecedented in size and level. The visit was prepared in a hurry and took place under the vigilant eye of the Western intelligence services. Therefore, the number and quality of signed agreements disappointed the optimists. But the bilateral meetings of officials, bankers and experts of the two countries that took place on the sidelines advanced the ongoing negotiations on strategic areas of cooperation and prepared serious deals. During the visit, influential publications noted the mutual interest of both countries in the accelerated growth of trade. Thus, the Global Times, which is close to the CCP Central Committee, noted the synergy of the two trends. Russia needs to increase the export of raw materials, especially energy. Against the backdrop of a rapid economic recovery, China needs to expand imports of the same oil and gas, agricultural products and other types of raw materials. The development of China's relations with the West repeats the history of the deterioration of Russia's relations with the West. The sanctions already imposed on China will be tightened. Access to sources of raw materials and markets will become a priority for Beijing for the foreseeable future. We should not turn a blind eye to the reaction of some Chinese experts and blogosphere activists to the arrival in Beijing of Mikhail Mishustin at the head of a thousandth army of the Russian elite. The emphasis is not even so much on the vital need for Moscow to receive income from trade with China as on the desirability of not offending the West, leaving the door open for relations with America. However, after 40 years of Chinese-American marriage of convenience, it would be naive to expect a quick change of shoes. There does not seem to be any improvement in relations between America and China, despite Biden's hints and the visit of Chinese Commerce Minister Wang Wentao to the United States. Overcoming the pathological hatred of politicians for China, business people in Washington continue to do business even in the most adverse conditions. In 2022, bilateral trade reached an all-time high of $691 billion. At the same time, the Americans were able to sell their goods to the Chinese for less than 154 billion. The reduction or abolition of duties, which President Trump began to introduce back in 2018 and President Biden is increasing, could help improve the quality and further increase trade. They cost each American family $1,000 a year. However, the prospects for curtailing the trade war are very illusory. The White House and both houses of the US Congress are on the warpath. Any attempt to improve US-China relations ends in scandal—Pelosi's scandalous trip, the big white ball... The same fate awaits current hopes. The visit of Pelosi's heir, Speaker of the House of Representatives Kevin McCarthy to Taiwan is being prepared. At the G7 summit in Tokyo, there was a military coordination between NATO and Japan. China, along with Russia, is designated in the final documents as the main enemy. The bloc's regional headquarters is to be opened in Tokyo. It is impossible to get rid of historical parallels. Similarly, in 1936, Japan concluded the Anti-Comintern Pact with Nazi Germany, directed against the Soviet Union. A few months later, the emboldened Japanese began an all-out war against the Celestial Empire, capturing Beijing, Shanghai, Wuhan and Nanjing in 1937. Only the diplomatic, military and financial assistance of the Soviet Union prevented the capitulation of the Republic of China along the lines of France. Stubbornly resisting China, in turn, prevented Tokyo from attacking the USSR at the already appointed time - August 29, 1941. Then there were two fronts - Soviet and Chinese. Now the situation is repeating itself. The Chinese were not patient. They were defending then. Now, relying on a reliable Russian rear, they launched a counteroffensive. Thanks to Beijing's 12-point peace plan for Ukraine and Xi Jinping's phone call with Zelensky, China is destroying the Yellow Threat stereotype at minimal cost in the European theater and strengthening its image as a peacemaker. There is competition with America. The first study trip to Kyiv, Paris, Berlin, Brussels and Moscow of Special Representative Xi Jinping, Ambassador Li Hui, has just ended. It was preceded by trips of "heavyweights" - Chinese Vice President Han Zheng, foreign policy curator on the party line Wang Yi, Foreign Minister Qin Gang. Another area of China's global counteroffensive is to prevent the West from filling the strategic vacuum in Central Asia. That was the task of the summit of the five countries of this region and China in Xi'an, the ancient capital of several Chinese dynasties. This also meets the strategic interests of Moscow. The combat coordination of the two mighty powers of the Eurasian continent is gaining momentum and taking on new forms. How can one not recall that in March, Xi Jinping, when saying goodbye to Vladimir Putin on the steps of the Grand Kremlin Palace, said: “Now there are changes that have not happened in 100 years, and we are driving these changes.” Putin's answer was short but meaningful: "I agree."

Zelensky’s European tour has won critical support for Ukraine’s counter-offensiveAs the war in Ukraine intensifies, President Volodymyr Zelensky has concluded a series of successful visits to Rome, Berlin, Paris and London to shore up support from key allies. The timing of Zelensky’s visit is critical for Ukraine’s efforts on the battlefield and beyond. It has allowed the Ukrainian presidenta and his main European allies to coordinate their approach on the economic and diplomatic fronts of the war as well, which will be equally decisive in determining how this war will end, and when. Military support from his allies has been on top of Zelensky’s agenda during his whistle-stop tour of Europe. And finally, it seems that Ukraine’s European allies are following in Washington’s footsteps and moving beyond their earlier hesitation to provide Kyiv with more equipment for its upcoming counter-offensive in Bakhmut. On Saturday, May 13, ahead of Zelenskiy’s arrival in Berlin, Germany announced a further €2.7 billion (£2.35 billion) of support, including much-needed quantities of artillery ammunition. In addition, German arms manufacturer Rheinmetall confirmed a joint venture with Ukraine’s Ukroboronprom to build and repair tanks in Ukraine. On Sunday, May 14, Zelensky secured promises in Paris from the French president, Emmanuel Macron, for new armoured vehicles and air defence systems. On Monday, May 15, British prime minister Rishi Sunak agreed to provide Ukraine with hundred of attack drones, in addition to the Storm Shadow cruise missiles that have already been delivered to strengthen Ukraine’s air defences. These commitments are important for providing Ukraine with the ammunition, equipment, training and repairs the country needs against a Russian adversary that has significant manpower advantages. This does not guarantee a sweeping success of the anticipated Ukrainian counter-offensive, but it will make serious gains on the battlefield more likely for Kyiv. And it signals a commitment by its western partners to back this offensive with more than encouraging noises.The sanctions gameThe war in Ukraine is not only fought, and can not only be won, on the battlefield. From the beginning, the western approach was twofold: strengthen Ukraine and weaken Russia. The latter was achieved through unprecedented sanctions, with the EU now on its tenth sanctions package since Russia annexed Crimea in 2014. The EU is now discussing the eleventh sanctions package, this time with a focus on enforcing existing sanctions and closing loopholes by imposing secondary sanctions against countries, companies and individuals deliberately circumventing the existing sanctions against Russia. Sanctions will also be discussed at the G7 summit in Hiroshima, Japan, from May 19 to 21. Further measures are expected to target the Russian energy sector and place more limitations on exports to Russia. The four European countries Zelensky visited in the past few days – France, Germany, Italy and the UK – are all members of the G7, while the EU attends as an observer. Including other members the US, Japan and Canada, the G7 represents some of Ukraine’s most powerful partners who will send an unambiguous message to Russia concerning sanctions and their enforcement. This will not break the Russian war machine, but it will make it more costly, including for Russia’s few remaining allies, to sustain the war effort in Ukraine at the current level. Seen from this longer-term perspective, it also makes Ukrainian gains in any counter-offensive more sustainable by limiting Russia’s capabilities to mount any offensives in the future.The third front: diplomacyMeanwhile, Chinese envoy Li Hui is beginning his tour of European capitals, including Moscow and Kyiv, to explore a political settlement for the war in Ukraine. This made it important for Zelensky to be sure that his red lines are clearly understood, accepted and communicated by Rome, Berlin, Paris and London. The support from these European capitals is no longer in doubt. And neither is support from Brussels. Nato secretary general Jens Stoltenberg was clear in his message at the Copenhagen Democracy Summit on May 15: he expects the alliance to commit to a multi-year support programme to help Ukraine move towards Nato military standards. This will be discussed at the Nato summit in Vilnius in July. The EU is considering a new China strategy, including how it can engage with China on the war in Ukraine. The union is open to such an engagement and has cautiously welcomed China’s position paper in this respect. But it is a major win for Zelensky that the president of the European Commission, Ursula von der Leyen, backed Zelensky’s peace plan which, among other things, rules out any territorial compromises. Zelensky’s visits to Rome, Berlin, Paris and London are part of an ongoing positioning of the major allies in this war. For the Ukrainian president, it was critical to make sure that he keeps the west united behind his efforts to defeat Russia. His apparent success in doing so indicates that he presented his European counterparts with a credible plan and realistic requirements for support. Yet it is also clear that Kyiv and its partners in Europe and beyond realise that there will eventually come a point at which they will have to negotiate an end to the war with Russia. The evident strength of western unity and commitment that has transpired over the past few days is as much a message of support to Ukraine as it is one of deterrence for Russia and caution to China. The way it will be received there will determine how soon a negotiated settlement will be possible that restores Ukraine’s sovereignty and territorial integrity.

In order to ‘walk, chew gum, and play chess’ at the same time, the US will have to both invest at home and sign more trade deals. A speech late last month by Jake Sullivan, President Biden’s national security adviser, on “Renewing American Economic Leadership” clarified that the administration wants to build resilience to “de-risk” from China. But dealing with Beijing will require more than investing at home. Washington also needs to re-engage in negotiations with China to manage difficulties in the bilateral relationship. And to better compete, the United States should get back into the business of signing trade deals. As Trade Representative Katherine Tai quipped during her 2021 confirmation hearing, the United States can “walk, chew gum, and play chess” at the same time. The Biden administration should not only invest in domestic resilience, but also participate in new trade agreements and negotiate directly with Beijing. Over the past two years, China joined the Regional Comprehensive Economic Partnership (RCEP), began acceding to the Digital Economy Partnership Agreement (DEPA), and applied to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). China’s integration into these new frameworks will create efficiencies in its own economy, while binding Beijing closer to the rest of Asia. Meanwhile, the United States does not expect to see the first “real outcomes” from the Indo-Pacific Economic Framework (IPEF) until the end of 2023, more than one year after its announcement. IPEF, moreover, lacks the market-access agreements characteristic of other, more substantive economic agreements. It is not surprising, then, that the 2023 Lowy Institute Asia Power Index ranks China 100 out of 100 on its “economic diplomacy” index, while the United States receives a ranking of only 34.6. The 2023 State of Southeast Asia survey similarly shows that only 21.9 percent of respondents view the United States as a leader in championing free trade, down from 30.1 percent in 2022. To be fair, Beijing has significant ground to cover before its markets become as free and as open as those in the United States. What many trade partners care about, however, is not where China and the United States have been, but where they are going. To many, it appears as if Washington is turning inward while Beijing continues to open its markets. This leads to the second error in Jake Sullivan’s “new consensus” on international economic policy. He expresses fatalism about China’s economic trajectory without giving credence to the possibility that China may change, or that the United States can play a role in influencing Beijing’s behavior. Sullivan explains, when “President Biden came into office, we had to contend with the reality that a large non-market economy had been integrated into the international economic order in a way that posed considerable challenges.” In response, Sullivan focuses on building domestic “resilience” and “capacity” to reduce America’s dependence on China. Washington appears to have given up on addressing the non-market practices contributing to U.S. dependence on China in the first place, including state subsidies and dumping. The administration also seems to have forgotten that access to low-priced imports is an important factor in the competitiveness of U.S. firms and the standard of living of American consumers. Fatalism about China’s trajectory tracks with the Biden administration’s overall Indo-Pacific Strategy, which does not seek to “change the PRC but to shape the strategic environment in which it operates.” Fortunately, Treasury Secretary Janet Yellen has bucked the trend by stating that she hopes to “engage” with Beijing “in an important and substantive dialogue on economic issues.” Not trying to influence Beijing, on the other hand, would give up an essential element of any effective China policy. Of course, prior negotiations were by no means unqualified successes. The Trump administration’s “phase one” trade deal largely failed to change Beijing’s behavior, in part, because the bilateral purchase agreements effectively, as Yukon Huang and Jeremy Smith of the Carnegie  Endowment for International Peace put it, “prescribed state-managed trade over market forces.” Other negotiations, however, have seen more success. Former Treasury Secretary Hank Paulson was able to persuade Beijing to revalue its currency by more than 20 percent in the late 2000s, helping to level the trade relationship. China’s WTO accession negotiations also moved the needle on the country’s economic policy. While Beijing failed to carry out many of its WTO commitments, China did reform key aspects of its economy and, notably, slashed its average tariff level from 15.3 percent in 2001 to 9.8 percent over the next decade. U.S. policymakers should learn the lessons of past negotiations rather than standing by as U.S.-China economic relations deteriorate further. One way to pressure Beijing to continue along the path of reform and opening up would be to carry out negotiations in concert with U.S. friends and allies. The Trump administration gave up significant leverage by dealing with Beijing bilaterally, outside the parameters of the international trade system. Plurilateral negotiations with U.S. partners — many of whom share U.S. grievances — may be more effective at convincing China to change course. The consequences of not having an effective economic dialogue with Beijing will become more apparent over time. Despite Washington’s wishes, China is simply not going away. Beijing will continue to join new trade agreements and integrate itself deeper into the global economy, even as the United States focuses on building resilience at home.

The further strengthening of ties between the US and the Philippines is indicative of the breadth and scope of maritime security arrangements in the region.Only four months into the year and 2023 has already been very busy in terms of United States (US) engagement in the Indo-Pacific, particularly in East Asia and the South China Sea. During Philippine President Ferdinand Marcos Jr’s recent visit to the US, alongside reaffirming the continuation of the broader ambit of bilateral partnership, the two countries established ‘ground rules’ on US-Philippine defence cooperation on 3 May. The US and the Philippines have a long-standing treaty partnership that dates back to the post-World War II era. The treaty partnership began with the signing of the Mutual Defense Treaty (MDT) in 1951, which established a framework for military cooperation and mutual defence between the two countries, making Manila the oldest ally of Washington in the region. Beijing, quite expectedly, has expressed its disapproval of this new development characterising it as Washington’s attempt at drawing Southeast Asian nations into a small clique to contain China. Beijing’s usual reaction whenever the US conducts outreach in the region comprises various versions of the narrative that Washington is forcing countries to sacrifice their sovereign identities by becoming pawns in the latter’s efforts to destabilise the region and turn countries against China. Mao Ning, a spokesperson for the Chinese Foreign Ministry stressed that the South China Sea is not a hunting ground for countries outside of it. Meanwhile, the state-run foreign-language news channel, CGTN, warned against President Marcos’s ‘dangerous courtship.’The reinforced scope of the US-Philippines defence partnershipInterestingly, in addition to reiterating US commitments as Manila’s treaty partner and referencing the strong need for maintaining peace and stability in the South China Sea, the joint statement noted that the two sides “affirm the importance of maintaining peace and stability across the Taiwan Strait” as an indispensable element of global peace and security. Defence ties between the US and the Philippines have indeed expanded to include, first the South China Sea and now, the Taiwan Strait. What this indicates is a steady consolidation of security frameworks in the region that would form bulwarks against Beijing’s repeated and expanding overtures into the South China Sea and pressures on Taiwan. Given that the Taiwan Strait lies at a distance of only 800 miles from Manila, it is not surprising that the security of the Strait has been included under the expanded purview of Washington and Manila’s treaty partnership. Under the basic framework of the MDT, the US and the Philippines agreed to come to each other’s aid in the event of an attack by an external aggressor. The MDT has been an important part of the US-Philippines relationship, providing a basis for close military cooperation and joint training exercises. The US has provided military aid and assistance to the Philippines, helping to modernise its armed forces and improve its capabilities in areas such as maritime security and counterterrorism. Despite episodic friction over issues such as human rights and the rule of law, the US-Philippines treaty partnership remains an important part of both countries’ foreign policy agendas. As the geopolitical landscape in Asia continues to evolve, the US-Philippines treaty partnership will likely remain an important pillar of stability and cooperation in the region. Now, the partnership includes a broadening of “information sharing on the principal threats and challenges” to the peace and security of the US and the Philippines. The upgraded ‘ironclad’ alliance commitments also make room for the inclusion of new sites which could contribute to the enhancement of Manila’s maritime security and modernisation efforts under the U.S.-Philippines Enhanced Defense Cooperation Agreement. It also creates a greater space for US involvement in the improvement of local and shared capacities in the delivery of humanitarian assistance and disaster relief.What this means for the Indo-PacificPresident Marcos’s visit comes close on the heels of South Korean President Yoon’s visit to Washington which resulted in the latter agreeing to send an Ohio-class nuclear ballistic missile submarine to Seoul to strengthen deterrence against Pyongyang’s recent nuclear flexing. Earlier in April, Manila allowed Washington access to four additional military bases for joint training, pre-positioning of equipment and building of facilities such as runways, fuel storage, and military housing. Access to these new locations is significant as two of them—Isabela and Cagayan—are positioned facing Taiwan while the Palawan base is in proximity to the Spratly Islands—a source of a long-standing dispute between China and the Philippines. The two countries have agreed to resume joint maritime patrols in the South China Sea and Manila is also assessing a trilateral security pact involving Japan. In mid-April, before President Marcos’s visit, the two countries participated in their largest-ever joint military drills, Exercise Balikatan, in the South China Sea. China is decidedly furious at the pace and scope of these new developments. Undoubtedly, steps like these are strategic and oriented towards boosting the defence postures of ‘like-minded’ countries in the region. But despite Beijing’s strong censure, these measures are indicative of the breadth and scope of maritime security arrangements in the region being on the course to be further strengthened.

Located in southeastern Ukraine, Zaporizhzhia Nuclear Power Station (ZNPP) is Europe’s largest power plant that produced 23% of all Ukrainian electricity before Russia's invasion.  This critical energy source is amidst the chaos and destruction of the ongoing Russia-Ukraine conflict, a harrowing struggle that has wrought immeasurable suffering and upheaval upon the region. Following its capture by the Russian forces on March 4th 2022, there have been drastic disruptions to safe energy production and a heightened global concern for nuclear safety in the region. Introduction and backgroundZaporizhzhia Nuclear Power Plant (ZNPP), located in the Ukrainian city of Enerhodar, was built by Soviet design in the 1980s, with its last reactor being connected to the grid in 1995.  Amongst the ten largest nuclear facilities in the world, the Zaporizhzhia power plant consists of six water-cooling and water-moderating pressurized reactors. A global nuclear scare started on February 24, 2022, when Ukraine informed the International Atomic Energy Agency (IAEA) that “unidentified armed forces” have taken control of all facilities of Chornobyl Nuclear Power Plant located in the Exclusion zone. The IAEA appealed for maximum restraint to avoid any action that may put the country’s nuclear facilities at risk and stressed the IAEA’s 2009 General Conference decision that “any armed attack on and threat against nuclear facilities devoted to peaceful purposes constitutes a violation of the principles of the United Nations Charter, international law and the Statute of the Agency”. Later that week, on March 2nd, Russia stated that its military forces have taken control of the territory around Ukraine’s Zaporizhzhya Nuclear Power Plant. The next day, a large number of Russian tanks and infantry broke through the block-post into the town of Enerhodar, just a few kilometers from the ZNPP. Director General Grossi, appealed for “an immediate halt to the use of force at Enerhodar and called on the military forces operating there to refrain from violence near the nuclear power plant.” By March 4th, Ukraine informed the IAEA that the ZNPP had been shelled overnight, and a fire broke out on site. Although no essential equipment was affected, the first military action      resulted in the activation of the IAEA’s Incident and Emergency Centre in full response. At the end of the day, Ukraine announced that Russian forces had taken control of the ZNPP, but the power plant continued to be operated by its regular staff.  At the time, out of the plant’s six reactor units, two had undergone controlled shut down, two were being held in low power mode, one was shut down for maintenance and one was operating at 60 percent power. ZNPP’s dire situation since March 4, 2022Before the conflict, the ZNPP had access to the grid through four high-voltage power lines, but they have now all fallen victim to the fighting. The back-up power lines connecting the ZNPP to a nearby thermal power station are also down. The plant had also previously temporarily lost direct access to the electricity grid but could then still receive power through available back-up lines, or from one of its reactors that was still operating at the time. The Russian conquest was soon followed by disruptions in the electricity supply to the nuclear power plant, one of the seven indispensable pillars of nuclear safety. Less than two weeks after Russian forces seized the plant, Zaporizhzhia lost one of its three power lines. Since then, mainly as a result of shelling or other military action nearby, the nuclear plant has suffered numerous power cuts, mainly as a result of shelling. Although it has emergency diesel generators that are available to provide backup power, a secure off-site power supply from the grid is integral to ensuring nuclear safety.  Thus, following its first complete external power outage in August, Director General Rafael Mariano Grossi set off from the Agency’s headquarters on an IAEA Support and Assistance Mission to Zaporizhzhia (ISAMZ) to undertake vital safeguards activities at the plant.  That October, Zaporizhzhia lost its last remaining external power source due to renewed shelling, and had to rely on diesel generators again to cool the reactor and support other nuclear safety and security functions. In the next week, Zaporizhzhia lost all external power two more times, receiving electricity from a backup system for the third time in a span of ten days. Similar incidents unfolded in November as well, as the IAEA Director General continued to urge for the critical need to demilitarize the zone.  Based on historical data and industry experience, the nuclear industry aims for an average unplanned outage rate of less than 0.1 per reactor per year which statistically would mean less than one unplanned outage every 10 years. Zaporizhzhia Nuclear Power Plant experienced six in the past year alone. Cold shutdown of the ZNPP reactors doesn’t remove the risk – Spent fuel pools need constant coolingThe fission reaction that generates heat in a nuclear power plant is produced by positioning a number of uranium fuel rods in close proximity. Shutting down a nuclear reactor involves inserting control rods between the fuel rods to stop the fission reaction.The reactor is then in cooldown mode as the temperature decreases. According to the U.S. Nuclear Regulatory Commission, once the temperature is below 200 degrees Fahrenheit (93 Celsius) and the reactor coolant system is at atmospheric pressure, the reactor is in cold shutdown. When the reactor is operating, it requires cooling to absorb the heat and keep the fuel rods from melting together, which would set off a catastrophic chain reaction. When a reactor is in cold shutdown, it no longer needs the same level of circulation. It was announced on September 11, 2022 by Energoatom, operator of the ZNPP that it was shutting down the last operating reactor of the plant’s six reactors, reactor No. 6. The operators have put the reactor in cold shutdown and this shutdown has mitigated a risk. Spent fuel pools also need constant circulation of water to keep them cool. And they need cooling for several years before being put in dry casks. One of the problems in the 2011 Fukushima disaster in Japan was the emergency generators, which replaced lost off-site power, got inundated with water and failed. In situations like that you get “station blackout” – and that is one of the worst things that could happen. It means no electricity to run the cooling system. In that circumstance, the spent fuel overheats and its zirconium cladding can cause hydrogen bubbles. If you can’t vent these bubbles they will explode, spreading radiation. If there is a loss of outside power, operators will have to rely on emergency generators. But emergency generators are huge machines – finicky, unreliable gas guzzlers. And you still need cooling waters for the generators themselves. The biggest worry is that Ukraine suffers from a sustained power grid failure. The likelihood of this increases during a conflict, because pylons may come down under shelling or gas power plants might get damaged and cease to operate.  According to one of the IAEA’s latest updates (#154, April 21, 2023):  “As a result of the warmer weather, the operator has started to put reactor Unit 6 in cold shutdown which is expected to be reached by the weekend, leaving only Unit 5 in hot shutdown to produce hot water and steam for the site. The two reactors were in hot shutdown during the winter to provide steam and heating to the ZNPP as well as heating to the nearby city of Enerhodar, where many plant personnel live.” The cooling pumps for the spent fuel pools need much less electricity than the cooling pumps on the reactor’s primary and secondary loops, and the spent fuel cooling system could tolerate a brief electricity outage. Now, at least if the plant loses offsite power, the operators won’t have to worry about cooling an operating reactor with cranky diesel generators. However, the plant still needs a reliable source of electricity to cool the six huge spent fuel pools that are inside the containment structures and to remove residual heat from the shutdown reactors. The serious risk of military actions for spent fuel storage racksOne more important factor is that the spent fuel storage racks in the spent fuel pools at the Zaporizhzhia Nuclear Power Plant were compacted to increase capacity, according to a 2017 Ukrainian government report to the IAEA. The greater number and more compacted the stored spent fuel rods, the more heat they generate and so more power is needed to cool them. There is also a dry spent fuel storage facility at the plant. Dry spent fuel storage involves packing spent fuel rods into massive cylinders, or casks, which require no water or other coolants. The casks are designed to keep the fuel rods contained for at least 50 years. However, the casks are not under the containment structures at the plant, and, though they were designed to withstand being crashed into by an airliner, it’s not clear whether artillery shelling and aerial bombardment, particularly repeated attacks, could crack open the casks and release radiation into the grounds of the plant. The closest analogy to this scenario could be a terrorist attack that, according to a seminal study by the National Research Council, could breach a dry cask and potentially result in the release of radioactive material from the spent fuel. This could happen through the dispersion of fuel particles or fragments or the dispersion of radioactive aerosols.  This would be similar to the detonation of a “dirty bomb,” which, depending on wind direction and dispersion radius, could result in radioactive contamination. This in turn could cause serious problems for access to and work in the plant. According to the IAEA’s latest update at the time of writing this analysis (#155, April 28, 2023): “IAEA experts present at Ukraine’s Zaporizhzhya Nuclear Power Plant (ZNPP) were again forced to shelter this week after missile attack warnings, with the sound of continued shelling in the distance as military activity continues in the region. In addition, one landmine exploded near the site, Director General Rafael Mariano Grossi said today…The increased military presence and activity in the region again underlines the importance and urgency of agreeing on the protection of the plant, Director General Grossi added.”What is going on and what can be doneWe need to begin to realize and emphasize that the need for compromise extends beyond Russia alone. There has been a certain reticence around the acknowledgement that Ukraine, despite being the “aggrieved” country, must also be willing to make concessions.  To designate Russia as the sole provoker of hostilities at the Zaporizhzhia plant is an objective falsity. It would be illogical for Russia to shell the plant once it has already seized control, unless there were provocations from the Ukrainian side. Interestingly, in spite of countless calls to pacify the region from Ukrainian and international diplomatic leaders, The Times of London on April 7, 2023 published a report detailing a failed Ukrainian attack on the Russian-controlled Zaporizhzhia Nuclear Power Plant (ZNPP) that took place in October 2022. Ukrainian special forces launched an attack on the ZNPP, deploying US-provided HIMARS rockets at the site — an attempt that ultimately failed because of a stronger Russian counteroffensive. Any sort of projectiles nearing the site of a nuclear power plant is an inherently hazardous and potentially catastrophic assault, regardless of the origin of the launch.   Given the high stakes involved and the potential for irreparable harm, it is imperative for even Ukrainian forces to exercise restraint and refrain from any military action that could escalate the conflict, including airstrikes on Zaporizhzhia, even if it is under Russian control. Taking into account the tumultuous events that have transpired at Zaporizhzhia this past year, for the sake of preventing a global nuclear disaster, it is pertinent to prioritize nuclear safety. Counterintuitive as it may seem, it may be more prudent for Ukraine to strategically withdraw from the ZNPP site and attempt to repatriate it later in the war, when more comprehensive diplomatic negotiations can happen and Russia potentially depletes its resources.  War, in our opinion, is the worst enemy of nuclear safety. This is an unprecedented and volatile situation. Only through active, pragmatic engineering and nuclear diplomacy can an amenable and lasting solution to this vexing problem be found. In the foreword of President John F. Kennedy’s book, Profiles of Courage, his brother, Robert Kennedy said, President Kennedy was fond of quoting Dante that “the hottest places in Hell are reserved for those who, in a time of great moral crisis, maintain their neutrality” (December 18, 1963).  The potential catastrophic consequences of the Zaporizhzhia nuclear power plant conflict demand action and a willingness to take a stance.  For Ukraine, taking a stance can mean stepping back and protecting the world from a nuclear calamity. The failure to do so risks being condemned to the “hottest places in Hell,” not in a figurative sense, but in a literal one. As the memory of the Chornobyl Disaster of 1986 still lingers, the potential danger posed by Zaporizhzhia's six reactors far surpasses that of the single reactor that caused the Chornobyl disaster. In the unfortunate event of an explosion, the repercussions would be hexfold that of Chernobyl's catastrophic aftermath, marking a somber moment in the history of nuclear power. Despite the uncertainty surrounding the outcome of the  Russia-Ukraine conflict, the end of this protracted war is imminent. Even if we are facing problems that, as Robert Kennedy put it, people “fifty, even ten years ago, would not have dreamed would have to be faced,” it is of utmost importance to prioritize humanity above political objectives.  Following Dr. Henry Kissinger’s advice, Ukraine may like to exercise diplomacy, which “is the art of restraining power”, rather than brute force to repatriate its own Zaporizhzhia Nuclear Power Plant, considering the high risks associated with military action on site. Ukrainians should not shame their military officers if they retreat from Zaporizhzhia, but rather, commend them for their strategic investment into the future prosperity of their country, their continent and possibly, their planet. A true measure of a hero lies not in their victories, but in their willingness to fight for what is right, even in the face of overwhelming odds. Right now, possibly accepting status quo at Zaporizhzhia is, at least in our opinion, what is the most right, but most certainly what is imperative. With Russia’s adamant military politics, Ukraine would be bravely resisting aggression on behalf of the world, on behalf of a future.  We realize that the IAEA has called on Russia and Ukraine to set up a “safety and security protection zone” around the plant. However, the IAEA is a science and engineering inspectorate and technical assistance agency. Negotiating and establishing a protection zone at a nuclear power plant in a war zone is entirely unprecedented and totally different from all past IAEA efforts. Establishing a protection zone requires negotiations and approvals at the highest political and military levels in Kyiv and Moscow.  It could be accomplished through backchannel, Track II-type diplomacy, specifically nuclear safety-focused engineering diplomacy. In the meantime, the IAEA needs strong support from the United Nations Security Council in the form of a resolution, mandate or the creation of a special commission. Admittedly, this is only a stopgap measure. In parallel with the International Atomic Energy Agency’s effort under the leadership of its Director, General Rafael Mariano Grossi, we believe that the U.N. Security Council should immediately empower a special commission to mediate between the warring parties. It could be modeled after the United Nations Monitoring, Verification and Inspection Commission in 2000, and appoint a prominent, senior international statesman as its head. We believe the person should be of the caliber and in the mold of the legendary former director general of the International Atomic Energy Agency, Dr. Hans Blix of Sweden. Blix led the agency at the time of the Chernobyl accident in 1986 and commands respect in today’s Russia and Ukraine. The great Prussian military theorist Carl Philipp Gottfried von Clausewitz once said: “War is a mere continuation of policy by other means.”  These words still resonate today, reminding us that the quest for peace is not just about putting an end to violence, but about forging a path towards progress and prosperity. It is incumbent upon us to recognize that bringing an end to this conflict is not merely a cessation of violence, but a catalyst for the advancement of policy. As we strive towards resolving conflicts and achieving a lasting peace, it is our duty to recognize that this effort is not merely a tactical move, but a transformative one. By embracing a policy-driven approach, we can internalize the true nature of conflict, and use it as a means to move forward and effect real change. So let us be bold, but at the same time be pragmatic, and let us remember the words of Clausewitz as we work towards a brighter future for all. Let us see war not as an end in itself, but as a means to an end – a means to build a world where conflict is a thing of the past, and policy is the key to progress. President John F. Kennedy’s bold vision for political courage and making compromises in his aforementioned book, Profiles of Courage, also beautifully applies to this very context of Ukraine preserving its principles of sovereignty and territorial integrity while tactfully compromising with Russia over safeguarding Zaporizhzhia: “We shall need compromises in the days ahead, to be sure. But these will be, or should be, compromises of issues, not of principles. We can compromise our political positions, but not ourselves. We can resolve the clash of interests without conceding our ideas... Compromise does not mean cowardice. Indeed it is frequently the compromisers and conciliators who are faced with the severest tests of political courage as they oppose the extremist views of their constituents.”

It aims to signal its diplomatic ascendance and challenge Washington as the big shaper of outcomes. Late last month, Chinese President Xi Jinping finally made that much hoped-for call to Ukraine’s President Volodymr Zelensky and informed the world that his nation “always stood on the side of peace.” This was the first outreach by Beijing to Ukraine since  the latter’s invasion by Russia last February, and Zelensky was keen on this engagement, especially after Xi’s visit to Moscow in March. Ukraine views China as an important interlocutor that can engage with Russia and seems to have been encouraged by the “long and meaningful” phone call between the two leaders that in its view would “give a powerful impetus to the development of our bilateral relations.” Last week, Ukraine’s finance minister also suggested that Kyiv should use its bilateral relationship with China as leverage to bring an end to Russia’s full-scale invasion, though he refused to consider China as a friend. The Chinese President has been reported as saying that China, “as a responsible majority country,” would “neither watch the fire from the other side, nor add fuel to the fire, let alone take advantage of the crisis to profit.” But there was no suggestion that Beijing would be doing anything meaningful going forward. The call and associated choreography had more to do with positioning China as a global power that is willing to engage in resolving problems, as opposed to the US that is creating more trouble by continuing to support Ukraine and prolonging the war. China has already laid out its cards on the table when it comes to the Ukraine crisis. It had released a 12-point position paper on the political settlement of the Ukraine crisis earlier this February. In an attempt to present itself as a neutral peace broker, Beijing has enunciated a few standard principles, including respect for the sovereignty of all countries, resumption of peace talks, keeping industrial and supply chains stable and opposition to unilateral sanctions  as well as the use of nuclear weapons. Taking this forward, China has decided to send special representatives to Ukraine and hold talks with all parties in an attempt at peace-making. But beyond these principles, China’s credentials are hardly supportive of a larger role as a peace-maker, as it has long refused to view its ties with Ukraine and Russia at the same level. Russia has shown no inclination to step back from its aggression and Ukraine is seemingly preparing to launch a large-scale counter-offensive against Russian forces in a bid to retake territory in the east and south for which it has been preparing for months now. While Moscow has given no indication of backing down, perhaps assuming that it has time on its side and waiting for the Western consensus on backing Ukraine to collapse, Ukrainian forces feel that the weaponry delivered by the West over the past few months is likely to give them the momentum needed to shape battlefield realities in their favour. China is also unlikely to be viewed as an honest broker, given its ties with Russia that are increasingly becoming tighter. And despite repeated statements that the “sovereignty, independence and territorial integrity of all  countries must be effectively upheld,” Beijing has not only refused to acknowledge Russia’s violation of Ukrainian sovereignty, but has continued to privilege its partnership with Moscow. Though Xi’s visit to Moscow in March did not result in any concrete help to Russia, it did signal to the West that  the China-Russia entente can shape the global balance of power in ways that can be deleterious to Western interests. More than anything else, Chinese posturing in the Ukraine conflict is aimed at the West. In its position paper, Beijing talks about the need to abandon a “Cold War mentality” and argues that “the legitimate security interests and concerns of all countries must be taken seriously and addressed properly,” making it clear that it largely agrees with Moscow’s perspective that it was the West that created the conditions for this war with the expansion of the North Atlantic Treaty Organization (Nato). China has also been critical of Western sanctions on Russia, arguing that “relevant countries should stop abusing unilateral sanctions and ‘long-arm jurisdiction’ against other countries, so as to do their share in de-escalating the Ukraine crisis.” Both of these issues are germane for the long-term trajectory of China’s role on the global stage amid deepening tensions with the US. For China, clearly, this crisis is more about itself than it is about Russia. As China comes out of its covid- induced isolation, it would like to have a stable international environment for a sustained economic recovery. But it is also using an opportunity to emerge as a key global interlocutor by venturing into diplomatic arenas it has been shy of in the past, taking advantage of the West’s recent inward orientation. This effort was exemplified by its attempt to bring Iran and Saudi Arabia together in the highly volatile Middle East. China’s attempt at emerging as a global peace-maker is about presenting a diplomatic challenge to the US on the global stage. Beijing may not have much of an impact on the eventual outcome of the Ukraine crisis, but it is signalling that it is no longer shy of showcasing its growing diplomatic heft.

Chinese leader Xi Jinping was unanimously “reelected” for another five-year term at the Two Sessions, and the Chinese government approved significant changes in the party-state structure to counter the US-led West’s dominance and promote economic and technological self-sufficiency. At the same time, China is engaging in diplomatic activism in the Middle East and elsewhere, forcing Israel to reconsider regional dynamics and prepare for a protracted state of “struggle” between the two superpowers.  In March 2023, Chinese leader Xi Jinping marked several highly successful events. Internally, he was “reelected” for a third term as President, and externally, he brokered a normalization agreement between Saudi Arabia and Iran – without any American involvement. These two developments coincided with the Two Sessions, China’s annual parliament meeting, where Xi passed far-reaching reforms aimed at increasing China’s economic and technological self-reliance in the face of Western adversaries. Judging by his remarks, it appears that under Xi China will continue its proactive foreign policy directed against the US-led global order. This in turn will test Israel’s ability to continue to maintain a balanced foreign policy vis-à-vis the two superpowers. Israel must now account for China’s growing influence in diplomatic and security theaters in the Middle East, as well as Beijing’s closer relations with Iran and Russia. To ensure its own security and economic interests, it must reconsider the regional dynamic while engaging in dialogue with the relevant actors. Finally, the escalation of tensions between the superpowers forces Jerusalem to prepare for extreme scenarios, most notably war in the Taiwan Strait. After a decade as president, Xi Jinping was unanimously reelected by the Chinese parliament for another five-year term. The vote – in which Xi was the sole candidate – was held as part of the annual Two Sessions, the Chinese legislature’s most important political gathering. The main event usually takes place over a seven-day period in March, when approximately 3,000 delegates from the National People’s Congress (NPC) – the legislative body – and some 2,000 delegates from the top political advisory body, the Chinese People’s Political Consultative Conference (CPPCC), convene in Beijing. In the course of the gathering, the Premier delivers a work report, while the delegates pass legislation, make amendments to the country’s constitution, and approve appointments in various state bodies. This year’s events were especially significant because they occurred immediately following the 20th Congress of the Chinese Communist Party (CCP), held in October 2022. At that gathering, which takes place every five years, Xi was also appointed to a third term as general secretary of the CCP and Chairman of the Central Military Commission. Since the 1980s, every five years, the CCP has introduced widespread reforms in the structure of the party-state. Previous reforms included changes to the balance of power between the Party and the state in ways that conformed to the incoming leadership's priorities and vision, as well as domestic and foreign developments. This year, the NPC approved significant changes in the party-state structure, continuing the trend in which the CCP under Xi has been "swallowing up" the government, with the lines between the two becoming increasingly blurred. These changes reflect Xi's belief that only a strong and centralized party can deal with domestic and foreign challenges, particularly the United States, China's main strategic rival. Indeed, during a heavily-publicized meeting at the start of the Two Sessions between Xi and representatives of the Chinese business sector, the Chinese leader stunned the audience by launching a direct attack against Washington, which he blamed for "the unprecedented severe challenges" that China is facing, and for trying to "contain, blockade, and suppress" China. What made his remarks particularly noteworthy was that despite rising tensions between the superpowers in recent years, Xi avoided explicitly naming and shaming the United States, instead allowing Chinese diplomats to spar with Western hawks. As a matter of fact, an examination of Xi’s writings reveals that even early in his political life, he saw the West, and the United States in particular, through a Cold War prism. However, it was the trade war waged by the Trump administration, which later escalated into a comprehensive technological and geopolitical war, that reinforced for him the need for economic and technological independence. The Biden administration went even further in its efforts to prevent China from gaining access to critical technology, and unlike its predecessor, has been successful in securing allies’ support. The Chinese countermeasures can be found in its most recent reforms, which included increasing the powers of the Ministry of Science and Technology (MoST) through the establishment of a new decision making body, the Central Science and Technology Commission, which is likely to be headed by Xi himself. Some of the ministry's specialized functions were transferred to relevant government ministries as part of the restructuring. The changes will allow the ministry to focus on macro-management of competition in innovation and to foster local development of basic research, core technologies, and a solution to the problem of the "bottleneck" imposed by the West, such as restrictions on China's import of microchips and airplane engines. In addition, a new institution, the National Data Bureau, will be tasked with managing digital resources, under the auspices of the Chinese government’s top macroeconomic management agency, the National Development and Reform Commission (NDRC). This year's reforms likewise highlighted China's financial sector, with the establishment of the new National Financial Regulatory Administration (NFRA) and expanded powers for the China Securities Regulatory Commission (CSRC). It was also decided to cut 5 percent of the central government and party workforce. Beyond the economic rivalry with the United States, the ramifications of the war in Ukraine, and COVID-19 restrictions, Beijing faces a host of internal challenges: a skyrocketing debt-to-GDP ratio (at the end of 2022, it stood at 273 percent), a declining population, a real estate bubble, natural resource pollution, a slowdown in imports and exports, high savings levels among households, and income inequality. If the rivalry with the United States intensifies – for example, if China were to invade Taiwan – Beijing would have to anticipate the imposition of additional sanctions, similar to those that Russia has been struggling with for the past year. Yet until such time as the situation vis-à-vis the United States reaches a critical stage, if at all, and against the backdrop of increasing concern in the international business community about the direction China is heading under Xi, Beijing is attempting to project to the world “business as usual.” At the conclusion of the Two Sessions, the incoming prime minister, Li Qiang, appeared to be smiling as he told foreign reporters that the United States and China must cooperate, because “there are no winners in a conflict.” He also promised that he would ensure a competitive, market-oriented, and fair environment that would protect the rights of Chinese and foreign businesses. However, here too the Party’s “invisible hand” was evident when he added that “the role of the new government is to execute and implement the important decisions and plans laid out by the CPC Central Committee.” The new appointments of other senior positions reflected the same ambivalence that Li expressed in his remarks. On the one hand, the Congress decided to extend the terms of 24 of the 26 ministers and national commissions, among them the head of the China’s central bank, Yi Gang, and Finance Minister Liu Kun, even though they had reached retirement age. One of the two new appointees, on the other hand, is Minister of National Defense Li Shangfu, who has been sanctioned by the US since 2018 for purchasing Russian weapons. Unlike his predecessors, who had battle experience, Li is an aerospace engineer in training. He was the former director of the People's Liberation Army's (PLA) space and cyber programs, as well as the deputy commander of the PLA's Strategic Support Force, which was in charge of China's space, cyber, and electronic warfare capabilities. Aside from the obvious defiance toward the US, his appointment demonstrates the importance that China places on modernizing China's military technology, given the ever-increasing restrictions imposed on technological imports to China. Self-sufficiency should not be confused with isolationism. The agreement brokered by Beijing between Saudi Arabia and Iran on March 10 – while  the Two Sessions were in session – was the clearest indication that China intends to maintain its active foreign policy. Granted, China pushed through an open door, given the conflicting parties’ inherent need for an agreement to focus on their economies, and only time will tell whether the agreement will hold; nonetheless, this was the first time that Beijing has led any kind of mediation effort, let alone successfully, and the United States was not even in the room. In doing so, China has demonstrated that it can use its dominant economic and commercial position to advance diplomatic and security objectives, ostensibly as an "alternative" to the United States. China’s global ambitions are not limited to the Middle East. The Belt and Road Initiative (BRI), as stated in the government's work report, will celebrate its tenth anniversary in October. What began as a central-southeast Asian initiative has evolved into a global network of "silk roads" emanating from China and extending into space, with hundreds of massive infrastructure projects worth over $1 trillion in 146 countries. The BRI has had to deal with a number of implementation and funding challenges over the years, so it has been scaled back. At the same time, Chinese officials emphasize that it will remain a focal point of Beijing's foreign policy, with the emphasis shifting to smaller but more strategic projects such as bolstering global supply chains and cooperating in the digital domain, as well as healthcare, public policy, renewable energy, and people-to-people and diplomatic ties. Xi has unveiled other ambitious projects in recent years, most notably the Global Development Initiative (GDI), which is tasked with promoting the United Nations' goals for sustainable development, and the Global Security Initiative (GSI). At the conclusion of the Two Sessions, Xi announced the Global Civilization Initiative (GCI), the details of which remain unknown. As with the BRI, any success story that can be classified as development or security will be attributed to them, even if it occurred years before these initiatives. This is what happened with the Saudi-Iranian agreement or the Chinese peace initiative to end the Ukrainian war, both of which Beijing hailed as shining examples of the GSI in action. In practice, these initiatives reflect Beijing's desire to reshape the global order to reflect its interests and values, while undermining the United States-led West's dominance in its spheres of influence. For example, Xi described the GCI as "a new form of human civilization" that "shatters the myth that modernization is equal to Westernization. The bottom line is that the Two Sessions and the extension of Xi’s term of office indicate that China will continue to push itself to the forefront of the international stage. The next five years will be defined by a stronger push for self-sufficiency, financial stability, and technological advancement. At the same time, China will not close itself off to the rest of the world. On the contrary, China will not back down from "a struggle" against what Xi refers to as the West's and the United States' "attempts to blackmail, contain, and blockade" it. This spirit was evident during the first press conference given by China's new foreign minister, Qin Gang, who warned that "if the United States does not hit the brakes, but continues to speed down the wrong path...there will surely be conflict and confrontation." While Western doors are closing in on China, Beijing will continue to see Israel as a backdoor for securing core technologies that will help it achieve self-reliance, rendering Israel obsolete in the long run. This is evident in the recent influx of Chinese commercial delegations to Israel, following Beijing's lifting of travel restrictions. Simultaneously, the US-Israel Strategic High-Level Dialogue on Technology, launched during President Joe Biden's July visit to Jerusalem, will examine Israeli-Chinese cooperation, particularly in the less regulated hi-tech sector and academia. The agreement reached between Saudi Arabia and Iran, as well as Xi's recent visit to Russia, during which the parties agreed to "increase contacts over security issues in the Persian Gulf," indicates that China's diplomatic activism in the Middle East will only grow. The evolving situation in which China and the US both play key roles in regional geopolitics – against the backdrop of increased competition between the two countries and the war in Ukraine – forces Israel to reconsider regional dynamics. In order to prevent Iran from acquiring military nuclear power in peaceful means, Jerusalem must deepen its dialogue with Washington, Beijing, Moscow, and its Arab partners in the Negev Forum on regional security and economic interests. Finally, if a conflict between China and the United States is truly "inevitable," Israel must prepare for the worst-case scenario, in which two superpowers go to war in the Taiwan Strait, and consider the implications for its relations with Beijing.

With relations at an all-time low, punitive actions targeting China have become politically popular, even if they have no analytical basis. Five years ago, then president Donald Trump launched a tariff-fueled trade war with China designed to reduce the bilateral trade deficit. His successor, President Joe Biden, then added a decoupling focus by restricting high-tech exports and curtailing professional and financial links. Both wanted to reduce imports of manufactured goods and bring home more jobs. How should one judge the effectiveness of their policies? Back then, and even more so today, the logic of Trump’s fixation on trade deficits made little sense. But security concerns have now become the rationale for reducing America’s trade relations with China and undercutting China’s growth potential. Against these yardsticks, the results are mixed but on balance unconvincing, given the costs in the form of inflationary pressures, repressed export growth, and a projected decline in global output. But U.S. politicians from both parties strongly support these restrictive measures because the costs are not obvious to their constituents, while the benefits from appearing to be tough on China resonate well with voters. Rising trade deficits The recent U.S. Census Bureau data indicate that the politically sensitive U.S. merchandise trade deficit with China was larger in 2022 than when Trump became president, while America’s overall trade deficit hit an all-time high of $1.18 trillion. This reinforces the views of nearly all the economists surveyed at the launching of Trump’s trade war: that the tariffs would not reduce U.S. trade deficits and the costs would be paid largely by Americans. For the Trump administration, the wild card was the “phase one” purchase agreement, which called for an increase of $200 billion in China’s imports from the United States. But state-to-state purchase agreements have no logical basis when global trade is largely shaped by the market-driven decisions of firms and consumers and subject to unpredictable events such as the coronavirus pandemic. Economic principles tell us that how much a country saves and spends determines its trade balance. The combination of Trump’s large tax cuts and Biden’s huge expenditure initiatives has led to soaring budget deficits, which are mirrored in record trade deficits. All this has little to do with China. Yet the Biden administration still insists that China honor the purchase agreement and links the removal of tariffs to its fulfillment. Asking China to honor an agreement that made no sense to begin with as a condition for dropping another equally ineffective policy defies logic. Trade diversification but increasing import dependence on other countries But this focus on bilateral trade numbers overlooks the sharp decline in China’s share of trade with the United States. Whereas China accounted for 47 percent of the U.S. trade deficit in 2017, it accounted for only 32 percent last year, with most of this decline offset by the increasing shares of other East Asian economies. Europe’s share of America’s overall trade deficit also declined from 21 percent to 18 percent. Only Canada and Mexico, via the United States-Mexico-Canada Agreement (USMCA), were able to increase their share from 11 to 18 percent. More insights can be gleaned from looking at the components of trade. Although the value of U.S. imports from China was essentially the same in 2022 as it was in 2017, total U.S. imports increased by about $900 billion during this period. As a result, China’s share of the total, made up largely of manufactured goods, fell from 22 to 17 percent. This decline, however, did not reduce America’s dependency on imports of manufactured goods. The share of imports relative to overall expenditures on manufactured goods rose steadily to 34 percent in 2022 from 23 percent two decades ago. The decline in China’s share of U.S. imports of manufactured goods was more than offset by imports from other countries, notably Mexico and Vietnam. These two developing countries, more than others, were able to import heavily from the United States based on their locational advantages and free trade agreements. Vietnam and China share a border and are linked by the ASEAN-China trade agreement, while Mexico and the United States also share a border and are linked by the USMCA trade agreement. Less noticed, however, is the behind-the-scenes role that China plays in supplying the components and materials for these other countries’ exports to the United States. Most of Vietnam’s increased exports were in product lines where U.S. imports from China fell, such as computer accessories and telecommunication equipment. China’s exports to Vietnam have more than doubled since 2017, and its trade surplus nearly tripled by 2022. China’s exports to Mexico increased by nearly 30 percent last year, on top of a 50 percent increase in 2021. China may be exporting less to the United States directly, but it is now indirectly exporting more. This explains why China’s share of global manufacturing production has continued to increase from 26 percent in 2017 to 31 percent in 2021. As for U.S. exports, the total averaged about $1.5 trillion from 2017 to 2020 but then jumped to $1.9 trillion in 2022. But this increase was not in manufactured goods but in exports of energy products and chemicals to Europe, spurred by the Ukraine crisis. The trade war did little to expand U.S. exports to China, the share of which fell from 8.4 percent in 2017 to 7.5 percent in 2022. Costs and benefits of decoupling According to one study, U.S. firms were handicapped by tariff-related higher costs of their imported inputs, and coupled with China’s retaliatory tariffs, this resulted in U.S. exports to China being 23 percent lower than they would have been in the absence of the trade war. The consequence is that America’s trade war policies generated very little growth in exports of manufactured products, despite the priority given to those policies by both the Trump and Biden administrations. If the purpose of the U.S. punitive actions toward China was to weaken China economically, there is no clear evidence of that happening. By developing alternative export markets and tapping pandemic-driven demand in the West for manufactured goods, China pushed its share of global exports to record levels in recent years. Meanwhile, China’s imports as a share of its GDP have been declining steadily, from a high of 28 percent in the early 2000s to 17 percent in 2022. One could argue that the world has become more dependent on China in trade while China has become less dependent on the world. The benefits of decoupling—if any—should be weighed against the costs imposed on U.S. consumers and producers and damage done to the export competitiveness of U.S. firms. To counter such tendencies, the Biden administration is promoting domestic manufacturing with subsidies in the Inflation Reduction Act. Such actions can be justified for strategic reasons, but the rationale is weakened by protectionist Buy America conditions. U.S. policymakers often counter by pointing to China’s use of subsidies to promote strategic industries, but Chinese firms were keen to import key technologies and components to ensure that their products were globally competitive on cost and performance grounds. The recent semiconductor and other U.S. restrictions on China’s access to high-tech products are also problematic because these products are “dual use,” with a much larger commercial market relative to military applications. Such restrictions hurt the many U.S. firms that derive significant revenues from selling to China and may contravene World Trade Organization guidelines. The costs of trade-related distortionary policies can be substantial. One oft-cited study estimates that taxpayers end up paying about $250,000 for each job saved in typical Buy America programs. At a broader level, a recent International Monetary Fund study estimates that a combination of U.S. trade and technological decoupling measures could reduce global GDP by some 7 to 12 percent. Ultimately, the problem lies in the lack of clarity on U.S. policy objectives. What does it mean to undercut China, and how will the United States know if it has succeeded? With U.S.-China relations at an all-time low, punitive actions targeting China have become politically popular, even if they have no analytical basis. The reality is that the United States and China have no choice but to continue trading with each other. But with security overriding commercial considerations, the economic interdependence built up over decades is now being reversed, leaving everyone worse off.

​Although the dollar continues to be the dominant global currency, Russia and China could dent this dominance. In the aftermath of global financial exclusion, Russia has had to make some strategic adaptations. The West’s sanctions had crippling consequences, and the Kremlin scrambled to find alternatives. In light of these developments, China became an important ally, and the Yuan—its currency—has taken on a more prominent role. It is telling that in Russia, the yuan has surpassed the United States Dollar (USD) in trading volume, a feat achieved a year after the Ukraine conflict, which triggered a series of sanctions against Moscow. As Russia and China band together, one wonders what other shifts will take place and how they will shape the future. Change is afoot, and the Russian market bears witness. The month of February saw a watershed moment as the yuan surged past the dollar in monthly trading volume for the first time. The momentum continued into March as the gap between the two currencies widened, showcasing the growing sway of the yuan. It’s an impressive feat, considering that the yuan’s trading volume on the Russian market was once quite insignificant. The winds of change blew through Russia’s financial system as the year progressed. Additional sanctions had taken their toll on the few remaining banks that still held power to make cross-border transactions in the currencies of countries that had been deemed “unfriendly” by the Kremlin. One such bank was Raiffeisen Bank International AG, whose Russian branch played a significant role in facilitating international payments within the country. However, the lender found itself under the watchful eye of both European and US authorities, which only added to the pressure. These events spurred the Kremlin and Russian companies to shift their foreign-trade transactions to currencies of countries that had not imposed sanctions.Converging coalitionsThe bond between Russia and China is growing stronger, with both nations seeking to bolster their positions on the global stage. Their alliance has spread across various spheres: military, economic, and political. With relations between Russia and the West crumbling, China has emerged as a key partner for Russia, providing it with the necessary support to counter economic and political pressure. On the other hand, China is keen on expanding its global reach, especially in the Eurasian region, and sees Russia as an important ally in this regard. President Xi Jinping’s recent visit to Moscow and his pledge to expand cooperation are likely to take this partnership to greater heights. Trade and investment ties are set to grow stronger, with both nations seeking to reduce their dependence on Western economies. Russia’s focus on infrastructure development and mega projects is also likely to benefit from China’s expertise in these areas. Energy is another significant area of collaboration, with Russia being a leading exporter of oil and gas and China being the world’s largest importer of these resources. Technology is also an essential domain, with both countries investing heavily in research and development to remain competitive in the global economy. While the alliance between Russia and China will likely have far-reaching geopolitical consequences, it is a complicated relationship with both nations pursuing their interests, even as they work towards common goals. As a result of Western sanctions, Russia has shifted its foreign trade transactions away from the dollar and euro to currencies of non-restricted countries. By doing so, the Kremlin and Russian companies hope to decrease their dependence on the Western financial system and explore new avenues for conducting their trade and economic activities. This shift in strategy reflects Russia’s determination to maintain its economic stability despite restrictions on its access to the global financial system. It also underlines the growing importance of alternative currencies in global trade as countries strive to minimise the impact of sanctions and safeguard their economic interests.Structural overhaulsThe Russian Finance Ministry was not immune to the winds of change either. Earlier this year, it made the switch from the dollar to the yuan for its market operations. It even went a step further by devising a new structure for the national wealth fund, earmarking 60 percent of its assets for the yuan. The Bank of Russia joined the chorus, urging its people and businesses to consider moving their assets to the rouble or other currencies considered “friendly.” This would help mitigate the risk of having their funds blocked or frozen. As the world undergoes a seismic geopolitical shift, it seems Russia is moving in tandem, searching for ways to secure its economic future. However, the dollar still reigns supreme in the Russian market. Even with all the changes taking place, it remains the most widely used currency, ceding its throne only occasionally to the yuan. This underscores the enduring dominance of the dollar, which has played a significant role in Russia’s financial landscape for years. However, as the world continues to evolve, one wonders how long it can hold on to its crown.