A conference on the reconstruction of Ukraine took place last week in Rome. Leaders from across the world convened in Italy to discuss how to best help Ukraine during this period in which the war is still ongoing, and to start planning for the period when the war will be finished. Ukrainian President Volodymyr Zelenskiy met with US President Donald Trump’s Ukraine envoy, Keith Kellogg, and had a “substantive conversation” after Trump pledged to send more defensive weapons to Kyiv to strengthen its air defense.
In spite of all the best efforts, though, a diplomatic solution to the war in Ukraine still seems far from being achieved. The key reason for this is that the “natural” equilibrium for Russia, in which they do not have further incentives to continue or re-start the war, would only be reached when all the Russian-speaking regions of Ukraine (in the country’s south-east) are subject to Russian control. This would extend to the Odesa region, up to Transnistria, the Moldovan region already under Russian control. It would be similar to the “coastal scenario” that was already conceived in 2015, one year after Russia’s annexation of Ukraine.
But there is another relevant factor to be considered; namely, the Chinese role in the conflict. In our book Smart Money, we discussed how Russia’s invasion of Ukraine only happened three weeks after the meeting between Chinese President Xi and Russian President Putin, on the sidelines of the Beijing Winter Olympics on February 4th, 2022. On that occasion, the two countries signed their pact of so-called “limitless co-operation,” which included mutual military assistance. Analysts are still debating whether Xi gave an explicit “green light” to Putin’s invasion of Ukraine, and perhaps only historians will be able to provide an exact account of the events. What we know is that China has never formally condemned such an invasion, and its cooperation with Russia has strengthened in recent months.
In the midst of all this, a quite surprising event occurred a few days ago. An article was published in the South China Morning Post(SCMP), (a respected Hong Kong newspaper owned by “state-controlled” Alibaba), which provided an account of the preparatory meetings that occurred ahead of the July 24-25 EU-China Summit. During those meetings Chinese Foreign Minister Wang Yi made a series of remarks, the frankness of which reportedly shocked the EU delegation. According to the SCMP’s article, Yi told Kaja Kallas, the European Union’s top diplomat, that “Beijing did not want to see a Russian loss in Ukraine because it feared the United States would then shift its whole focus to Beijing, according to several people familiar with the exchange.”
Additionally, the foreign ministry repeated that China is “not a party” to the war. He “rejected the accusation that China was materially supporting Russia’s war effort, financially or militarily, insisting that if it was doing so, the conflict would have ended long ago.”
This would seem to confirm that China is quite happy to see the US being distracted by the war in Europe, rather than pivoting and focusing all their resources towards “containing China.” This seems the starkest admission to date that the war in Ukraine would be a proxy war between US and China, fought by their respective allies.
If this is the case, the implications seems obvious: 1) the war in Ukraine will continue for the foreseeable future, and even a ceasefire is unlikely in the short run; 2) the US will need to continue supporting Ukraine, if this is a proxy war with China; 3) European countries will need to significantly increase their military spending, because war in Europe will become a feature that will accompany EU countries for as far as the eye can see.
